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Full text of "Report of the Mayor's Committee on Milk, City of New York [microform]"

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Author: 



New York (City). 



Title: 



Report of the Mayor's 
Committee on Milk... 

Place: 

New York 

Date: 

1917 



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New York (City) Mayor's committee on milk. 

Report of the Mayor's committee on milk, city of New 
York. New York, 1917. 

85 p. incl. tables (1 fold.) diagrs. 25 J" 



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JLMilk supply— New York (City) [1. New York (City)— Milk supply, 
2. Milk. 3^ Cost— Accounting. 4^ Dairying— Accounting. i2-4. Milk- 
Cost of production] 



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Report of the Mayor's Committee on milk. 



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THE 



REPORT OF 
MAYOR'S COMMITTEE 
ON MILK 

CITY OF NEW YORK 



''i-y 




NEW YORK 
DECEMBER, 1917 




Date Due 




LIBRARY 




School of Business 



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REPORT OF 
THE MAYOR'S COMMITTEE 

ON MILK 

CITY OF NEW YORK 



NEW YORK 
DECEMBER, 1917 



P«HMBI 



INTRODUCTION. 

The organization of the Mayor's Committee on Milk was the result of a 
correspondence between Health Commissioner Haven Emerson and Mayor 
John Purroy Mitchel, which was as follows: 

October 1, 1917. 

To His Honor the Mayor of the City of New York. 
Sir: 

Allow me to call your attention to a serious addition to the burden of 
all the residents of this City in the further rise in the price of milk, and to 
ask you to call a committee of citizens to inquire into the reasons for such 
imusual cost of a necessity, and to suggest means for relief for the 
consumer. 

A year ago a milk strike was precipitated by the then yoimg, and but 
imperfectly organized, Dairymen's League of milk producers, who suc- 
ceeded in imposing their demands upon the dealers and distributors of milk 
in the City, with the result that the price of Grade B pasteurized milk to the 
consumer was raised from 9c. to 10c. The dealers offered at that time to 
show all details of their financial transactions to any representative com- 
mittee appointed by Your Honor or by the (jovemor, in justification of 
their retail prices. 

In February, 1917, the price of Grade B milk was again raised to the 
consumer from 10c. to lie, in July from lie. to Uj^c, on August 1st from 
llj^c. to 12>^c., and now (October 1st) from 12j4c. to 14c., and higher 
prices are to be expected. 

Within the past week the Dairymen's League, which now controls the 
source of 90 per cent of the fluid milk reaching this city, has made demands 
for still further increases in the contract price for milk for the next two 
months, and the dealers have acceded. The power of the Dairymen's 
League to control this necessary food in this City appears so nearly com- 
plete, and its organization so well supplied with funds, from the contribu- 
tions by its members of Ic. per hundred pounds of milk per month, that the 
usual protection of the public by competition, and the normal action of 
the law of supply and demand, no longer exist. 

The increase in the price paid by the City dealers to the farmers, 
beginning last October, developed such increase in the supply of milk that 
for some months past there has been a glut in the milk supply, exceeding 
the public demand at the prices charged to the consumer 

It is apparent from inquiry among the families of the poor, whom chiefly 
the nurses and doctors of the Department of Health meet in their profes- 



r 



sional work, that the use of milk has been f^^^fy^^^f^^^Zlll 
the increased price. In some districts the sales of mjlk for amily use have 
SLStsed 20 per cent, and this among precisely the fanuhes where the 
Sh and development of children depend largely upon *« generous^«- 
of milk instead of other less valuable and less smtable f°°d substitutes 
such as the proprietary baby foods and coarse soups, f "rt^«=™°'«' *"^ 
Zs been not only a reduction in the actual amount of '">lk bought for 
T^^Tl family ui but the mothers have bought for thexr children milk of 
! Wr ^de^or ;conomy sake, namely. B and C. instead of A grade, and 
to this practice, which has been increasing throughout the summer, the 
Se^:i„L of Health properly attributes the notable increase m the numb^ 
of deaths from diarrhoeal diseases in children under one yean L«t me 
call to your attention at this point the fact that bread and m.lk together 
supply 50 per cent of the total food requirements of all people above the 

"^ f^Seam from inquiry or from any published record of facts that 
the cost of producing and distributing milk has increased so far as to jus if y 
the prices now demanded. I am informed that existing l^ws forbid such 
coK>perative acts by dealers as would allow them to ^^""^f^^^^^^^^^ 
economies in the field of city pasteurization and delivery of milk, although 
these same laws do not seem to be enforced to prevent the action of ^the 
farmers, which has the force and effect of a controlling monopoly. 

At the request of the Dairymen's I^gue, and m conlerence with them 
and with representatives of the dealers, the Department of Health has 
radically revised the regulations by which the sanitary conditions and safety 
of our milk supply are protected, in order to remove suchjust causes of 
complaint as have been presented by the industry or lutve been discovered 
by the Department. These revised regulations were adopted by the Board 
of Health on September 27th and will be put in force at an early date. 

The consumers of the City are neither, protected nor organized and m 
the interest of their health, and in particular for the sake of the babies and 
school children of this city, I believe it important to have a prompt and 
public inquiry and report to you as to the rights and possibilities of relief 

in this matter. ... ... v „.._ 

In addition to the inquiry and recommendation for action by your 

administration, which may be expected from such a committee as you would 
appoint, I would suggest the propriety of using such premises m the aty as 
schools, police stations, hospitals, dispensaries, setUement houses. Depart- 
ment of Health offices, clinics and Baby Health Stations, for central points 
for distribution and sale of bread and milk and such other staple articles 
of food as now cost an excessive amount because of the extravagance and 
wastefulness of the present methods of local sales and distribution, if the 

committee approves. 

I would suggest as being particularly capable to carry out such an 
inquiry as above proposed, the following citizens, who can be relied upon 



^'■r-sr. 



•• I ••■■■ t4 !>1l i^Ml«F*^V 



to elicit the facts, give full publicity to the rights of producers and dealers, 
and, at the same time, keep foremost in mind the interests and absolute 
necessities of the constuner: 

Dr. Charles E. North, Sanitarian and Secretary of the National 
Commission on Milk Standards, Chairman. 

Mr. John H. Love, Chairman of the Committee on Foods of the 
Merchants* Association. 

Mr. E. B. Lewis, Member of the Advisory Council of the Depart- 
ment of Health. 

Mr. Bailey B. Burritt, General Director of the Association for 
Improving the Condition of the Poor. 

Mr. Hugh Frayne, of the American Federation of Labor. 

In prosecuting the inquiry which I am convinced such a committee could 
effectively undertake, I beg of you to put the services of the office of the 
Commissioner of Accounts and the Department of Health at their disposal. 

Respectfully, 

(Signed) Haven Emerson^ 

Commissioner of Health. 



Office of the Mayor. 

October 2, 1917. 

Dr. Haven Emerson, 

Commissioner of Health, City of New York. 

Dear Dr. Emerson : 

Your request for the appointment of a committee of citizens to protect 
the interests of the consumer and inquire into the causes of the present 
excessive prices for milk meets with my entire approval. The committee 
you have suggested will certainly insure an impartial investigation. 

It is evident that the consumers* interests, up to the present time, have 
not been adequately considered, and I believe a citizens* committee will be 
the most effective way of getting at the rights in the matter and seeing that 
all possible recourses for relief are considered. 

Such practical recommendations as they make will have the hearty 
support of the City administration, and if any facilities are needed which 
are available to the City departments, they will be at the service of this 

committee. 

I am inviting the citizens whom you have suggested to serve imme- 
diately and organize promptly for the investigation. 



Very truly yours, 
(Signed) John Purroy Mitchel, 



Mayor. 



•OH^ 



Organization of Mayor's Committee on Milk. 

On October 4, 1917, Mayor Mitchel appointed the following men to 
serve as members of a Committee on Milk: 

The Mayor's Committee on Milk. 
Dr. Charles E. North, 

Consulting Sanitary Expert (Chairman), 
30 Church Street. 
Mr. John H. Love, 

Chairman of Food Problems Committee, New York Merchants' 
Association. 
Woolworth Building. 
Mr. E. B. Lewis, 

J. M. Horton Ice Cream Co., 
205 East 24th Street. 
Mr. Bailey B. Burritt, 
General Director, 

Association for Improving the Condition of the Poor, 
105 East 22d Street. 
Mr. Hugh Frayne,* 

American Federation of Labor, 
2 East 23d Street. 
Dr. Erxest C. Levy was appointed Special Investigator. 

Offices were provided for the use of the Committee in the building 
occupied by the Department of Health, and the assembly room in the same 
building was set aside for the holding of hearings. 

On October 8th, four days after appointment, the Committee received 
the following letter of instructions from Mayor Mitchel : 

Office of the Mayor. 

October 8, 1917. 
To the Mayor's Committee on Milk. 

Gentlemen : 

The question which you are considering is by no means new. Its 
gravit>- has long been recognized by the community and acutely felt by the 
poor. For some time I have done everything in my power to impress on 
the Legislature the need of relief. After long delay the Legislature has 
taken action which makes it possible to intercede for the benefit of the 
community. 

Please consider at once the desirability of the establishment by the City 
of a pasteurizing plant in which milk for the City's institutions could be 
pasteurized for the City, the City purchasing direct from the producers or 
their representatives. Is the establishment of such a plant practicable? 
Would it be economically sound ? Is there any simpler way of securing for 
* Mr. Wm. Collins, of the American Federation of Labor, acted for Mr. Frayne. 



the City, in its purchase of milk, assurance of the elimination of unjust 
profits ? 

In view of the recent sharp rise in the price of milk and the threat of 
a further price increase, I request your Committee to study and report also 
upon the possible advantages of the establishment by the City of a system 
of pasteurization and distribution for the communitj"^ as a whole. The duty 
of considering this action has been placed squarely upon us by the Legisla- 
ture. The act " to define the policy of the State of New York in relation 
to the production, supply and control of the distribution of the necessaries 
of life, and to insure an adequate supply thereof at a reasonable price," 
authorizes action by the municipality whenever the City is faced with actual 
or threatened deprivation of necessaries by reason of excessive profits or 
otherwise. The soaring price of milk is a case in point. If the present 
uncontrolled commercial system of handling milk causes waste in the method 
of delivery, or opens the door to excessive charges due to private control, 
we must find means whereby the burden thus unnecessarily and unjustly 
placed upon the community can be removed. Between excessive profits and 
the lives and health of children, there can be but one choice. 

The law confers upon the City the right to sell necessaries "through 
such agencies as it may determine." Please, therefore, consider the possi- 
bility of establishing a milk distributing system under a grant of franchise 
or otherwise. Should any franchise be granted by the City, it must be on 
terms which place in the hands of the municipality absolute control over 
profits, and the system must reserve to the City ample power for the strict 
regtdation of the industry. In this connection, please look into the possi- 
bility of effecting economies through the establishment of a zone system, 
whereby the expenses of delivering milk in the City might conceivably be 
reduced. 

The existing situation threatens the lives of helpless children; its 
urgency demands concentration upon the problem and its uninterrupted 
consideration until a solution shall have been found. 

Very truly yours, 

(Signed) John Purroy Mitchel, 

Mayor. 

2. Scope and Program of Investigation. 

Before undertaking its work, the Committee considered it necessary to 
draw up a comprehensive plan for the conduct of the investigation in order 
that it might make the most economical use of the short time at its disposal. 

An investigation of this same problem by the Wicks Committee in 1916 
covered a period of six months and revealed the great magnitude and com- 
plexity of the main problem and the subsidiary problems involved. 

The present Committee was asked if possible to complete its report by 
December 1st, and, therefore, it was necessary' to plan the work on the basis 
of a period of not more than two months for active investigations. 

The following outline of subjects for investigation was drawn up: 



Statistics of N. Y. City Milk Suf^ly {S.L). 

a Number of dairy farmers. 

b Number of shipping stations for milk. 

Number of shipping stations for butter. 

Number of shipping stations for cheese. 

Number of shipping stations for condensed. 

Number of shipping stations for powdered. 
c Number of dairy cows. . , ^ _ _ _. , -.^ 
d Total quantity daily received by New York City. 
e Total quantity formerly received by New York City. 
/ Per cent, from each producing State— now. 
g Per cent, from each producing State— formerly. 
h Per cent in bottles from wagons 

Per cent, in bottles from stores , now and 

Per cent, in cans from wagons formerly. 

Per cent, in cans from stores. 
i Number of retail companies. 
f Number of retail wagons. . 

k Number of pasteurizing stations, country and aty. 

Sources of Information. 
State Department Agricultural Records. 
City Department Health Records. 
Wicks Committee Report. 
Dairymen's League Records. 
Milk Conference Board Records. 
"Milk Reporter." . ^ 

"New York Produce Review." 



a 

b 
c 
d 



Market Prices (PJI., SJ.). 
By producers* organizations. 
By dealers' organizations. 
Standard methods for making. 
Standard methods for controlling. 



Sources of Information. 

Dairymen's League. 
N. Y. Milk Conference Board. 
Federal Food Commissioner, 
State Food Commissioner. 
Cost experts. 



SUBJECTS FOR INVESTIGATION BY MAYOR'S COMMITTEE ON MILK. 

General Questions, 

« 

1. Is present high cost of milk justified? 

2. Can high cost be reduced? 



Cost of Milk Production {PH., A.A., SJ.). 
a On farms shipping to milk stations. 
b On farms shipping to butter factories. 
On farms shipping to cheese factories. 
On farms shipping to c'd milk factories. 
On farms shipping to m. powder factories. 
c Standard methods of cost accounting. 
d Variations in cost due to— 

Value of cows. 

Total volume of dairy milk. 

Average cow's production. 

Cost of feed. 

Food ration and pasture. 

Labor and machinery. 

Other farm business'. 

Sanitary requirements. 
e Theoretical vs. practical costs. 
/ Cow population, increase or decrease. 
g Value of farm labor. 

Sources of Information. 

State Agricultural Colleges and Stations. 
State Departments of Agriculture. 
State County Farm Bureaus. 
Selected dairy farms. 
U. S. Department of Agriculture. 
Country Banks. 



Cost of 

Cost of Collection— Fluid Milk {PM., AA., 

SJ.). 
a Carrying from farms to shipping station — 

Individual method. 

Co-operative method. 
b Shipping station charges — 

Receiving and testing. 

Washing and sterilizing cans and bottles. 

Pasteurizing, bottling, canning. 

Cooling. 

Supplies. 

Labor, etc. 
c Transportation — 

Freight. 

Refrigeration. 

Trucking. 

Ferriage. 



Suri^lus Milk {PJi., AA. 
SJ.). 

a Normal surplus. 

b Abnormal surplus. 

c Regulation of surplus. 

d Manufacture. 

e Storage. 



Prices and the Consumer {SJ.). 
EflFect of prices on quantity consumed. ^ 

Effect of prices on morbidity and mortality of in- 
fants and children. 
EflFect of prices on general health. 
Fffect of prices on tuberculosis. 
EflFect of prices on use of milk substitutes. 



a 
b 

c 
d 

f Effect of prices on special sections of city. 

Sources of Information. 

Milk distributors' records. 

N. Y. Citv Department of Health records. 

Infant milk station records. 

N. Y. A. I. C. P. 



Distribution. 

Cost of Delivery (PJI., AA.» 
SJ.). 

a City Station- 
Pasteurization. 

Bottling. 

Refrigeration. 

Washing and sterilizing. 

Accounting purchases. 
b Delivery — 

Horses and wagons. 

Drivers' wages. 

Loss on bottles. 

Shrinkage. 

Accounting sales. 



Sources of Information. 
Milk distributors' and employees' testimony. 
Milk distributors' books. 
Railroad freight agents. 



P.H.=Public Hearings. 
A.A.=Auditing Accounts. 
S. I.=Special Investigations. 



Prices of Fluid Milk, Versus Milk Products iP.H., 

a Price fluid milk vs. surplus milk. 

b Price fluid milk vs. butter. 

c Price fluid milk vs. cheese. 

d Price, fluid milk vs. condensed. 

e Price fluid milk vs. powdered. 

/ Price milk and milk products vs. oleomargarine. 

Sources of Information. 
Milk dealers. 

Dealers in milk products (Comm. Merchants). 
Trade Journals. 



Can Cost be Reduced? {PJi^ 

A.A., ^J..j. 

a Cost of production. 
b Cost of distribution. 



Sources of Information. 
All branches of investigation. 



t| j 



* 

y 



p 



11 

The method of securing information on the several subjects was through 
public hearings, auditing accounts and special investigations and it was 
proposed to do this work through the following channels : 

Mechanism of Investigations by Mayor's Committee on Milk. 

(P.H.) Public Hearings— 

(a) For producers : 

Large dairy farmers. 
Small dairy farmers. 
Producers for fluid milk market. 
Producers for butter. 
Producers for cheese. 
Producers for other milk products. 
Producers' organizations. 

(b) For experts on cost of production : 

From colleges of agriculture. 
Coimty farm bureau agents. 
State agriculture and dairy officials. 
Federal agriculture and dairy officials. 

(c) For distributors: 

Officers of distributing companies. 

Superintendents of country shipping stations. 

Milk buyers. 

Managers of city milk plants. 

Managers of city retail departments. 

(d) For consumers: 

Managers of infant milk depots. 
Officers of charitable organizations. 
City health officials. 
(A. A.) Auditing Accounts — 

(a) Of producers: 

Farm accounts. 
Producers' organizations. 

(b) Of distributors: 

Large retailers. 
Small retailers. 

■ 

Wholesalers. 
(S. L) Special Investigations — 

(a) To verify testimony at hearings. 

(b) To verify figures in accounts. 

(c) To secure statistics of supply. 

(d) To show conditions among producers. 

(e) To show conditions among distributors. 
(/) To show conditions among consumers. 
(g) As basis for recommendations. 

The Committee was assisted in its work by the office of the Commis- . 
sioner of Accounts of New York City. Leonard M. Wallstein, Com- 
missioner of Accounts, acted as special counsel for the Committee. He put 
at the Committee's disposal a large force of expert accountants. 

In its special investigations, the Committee was also assisted by the 



/• 






UFK /issoaation for Improving the Condition of the Poor. 

3. Work AccompKshcd. 
The following work has been performed by the Committee : 
i'ubhc heanngs, 11. 

Private conferences with the industry, 6. 
Auditmg accounts of producers, 17. 
Auditing accounts of distributors, 16. 
Special investigations, 10. 

repon ZpZ>^iToLt'\T:''i'°'''''^^ » *^ W'^"" Committee 
offtis work3 ^Z ^'l^'' Committee might have full advantage 

pu4etTcel?;?e Son o1 hT"""^ '^'^^ "«''^' -''''='• ^'^ - '^^ 
A «., afcertam the relation of high pnces to the quantity of milk uspH 

to 12^ JthrS^rST ''- ^-"^'^ -^ -- °^ «nSc waTt„rot 

to s^i-srcr.^.sr d- tltrr- ;;:^t ^rdS -^^^ 

what economies could be obtained by centklizing dis'^^En "'"^ 

secuL'T^ S S£Z:f ^^^"T "JP"^*^ ^°-"^«-- ^'^^ was 

paed f n>m £9!!^ L^TcLSS l^Z "?* 5'*^ ^"'^ «^"^ -»" 
ro.«„w ^. concermng the cost of production. 

P™Pl«e audit was made of the books of the Borden's F»rm P a . 
Co., Inc., through the services nf H.,k«w. d it , ."°™«" « i-arm Products 

The concisions r^S^f/'^^Jf^fH^wtans' *=^«'««<1 *«ou„ta„t. 

cacnea as a result of this mvestigation are as follows : 

per quart in October, 1917. 4 <** t m oepiemoer, 1916, to 14c. 

tion ^ fo^^c^:^ '"^•'*°" ^"^'^^^^ '-^ -P«ed the following tabula- 

From June, 1914, to December, 1917 in the Nf.w V„,i, n-^ 
several food products have advance d in pri^ Is f^lZsT ' ^'^ "'^^''^*' 

-S^^a^ ______ju^i9i4_D^i,7 !;;js 

Eggs per doz ^, rr— -^ increase 

Corn per bu ^ty ^-67 igi 

Pork per bbl ,^-72 2.00 178 

Whcat*1>er bu. ^^-^O 50.50 59 

Sugar ^r 100 Ibi .-^O 2.26 151 

Oatsp^bu.... . 3.32 6.90 m 

Beef per lb '.[',',][[ -43 .84}^ 5^ 

Cheese per lb •** .32 77 

Butter per lb i:.::::::::;: yt -^ty^ 7$ 

Milk per qua rt -^ .47 74 

'^ .14 55 



13 

Milk, therefore, has not been alone in its rise in price and has risen to 
a much less degree than nine other important food products. 

The bulletin published by the Bureau of Labor Statistics of the U. S. 
Department of Labor in November, 1917, entitled " Prices and the Cost of 
Living," gives a comparative table showing the average prices of food on 
September 15th of each year from 1913 to 1917, of which the following is 
an extract : 



Article Unit 

Sirloin Steak 1 lb. 

Bacon lib. 

Eggs 1 doz. 

Flour 1 lb. 

Corn Meal 1 lb. 

Sugar 1 lb. 

Milk 1 qt. 



Sept. 15, 1913 Sept 15, 1917 



Per Cent 
Increase 



.262 
.281 
.375 
.033 
.031 
.057 
.089 



.333 


27.1 


.442 


57.3 


.525 


40.0 


.073 


121.0 


.062 


164.5 


.098 


71.8 


.118 


32.6 



per cent 
per cent 
per cent 
per cent 
per cent 
per cent 
per cent 



For the same period in New York City the following figures are given : 

Per Cent 
Article Unit Sept. 15, 1913 Sept 15, 1917 Increase 

Sirloin Steak 1 lb. !264 IS 39.4 per cent 

Bacon lib. .262 .440 68.0 per cent 

Eggs 1 doz. .442 .592 33.9 per cent 

Flour lib. .032 .079 147.0 per cent 

Corn Meal lib. .034 .076 123.5 per cent 

Sugar 1 lb. .051 .092 80.4 per cent 

Milk 1 qt .090 .124 37.8 per cent 

■ 

The average percentage advance in the retail price of the six food 
products other than milk shown in the above tables was 80.3 per cent for 
the country at large and 82.0 per cent for New York City. The price of the 
six commodities thus advanced 2j4 times as much as milk in the coimtry at 
large and 2%o times as much in New York City. 

The rise in the price of milk in New York City since September, 1916, 
including both the prices paid to the producer and the prices at which milk 
was sold to the consumer, are shown in the following table expressed in 
cents per quart: 

Dealer Received 

Dealer r '^ ^ Dealer's 

Period Paid Retail Wholesale Actual Margin 

September, 1916 3.46 9 6 7.32 3.86 

October, 1916— January, 1917, 4 mos. 4.67 10 7 8.32 3.65 

Feb.— June, 1917, 5 mos 4.52 11 8 9.32 4.80 

July, 1917 4.84 11J4 8^ 9.82 4.98 

August and September, 1917. 5.94 12j4 9 10. 54 4.60 

October, 1917 7.46 14 10 11.76 4.30 

In the above tabulation the actual money received by the dealer is shown 
in the 4th coltunn and is made up from averages allowing 56 per cent of the 



INTENTIONAL SECOND EXPOSURE 



!t 



12 

iT^^l^^^^A^"^"^'""} "^ ^''^'^' ^^^ Y°^^ ^''^ Committee and 
the New York Assoaation for Improving the Condition of the Poor. 

3. Work Accomplished. 
The following work has been performed by the Committee: 
Public hearings, 11. 

Pri^te conferences with the industry, 6. 
Auditing accounts of producers, 17. 
Auditing accounts of distributors, 16. 
Special investigations, 10. 

r^i ''°"'^^^^^ "^'^^'^ ""^ ^"^ "'^^""^ contained in the Wicks Committee 
17^1 '^''' r^f"^ u """"^^ "^^ '^^ Committee might have full advantage 
t^ltT'^^^^^^ ''' -'^^^^^^ --^"^ '- '''' with condl 

A survey of 2^200 families of consumers was made, which had as its 
purpose to ascertain the relation of high prices to the quantity of nSc uslJ 

to m ntw'"^'"*' ~""^™"? *e quantity and price of milk was sent out 
to 1^ other aties m America. 

A questionnaire was sent to all distributors of milk in New York City 
to secure statistics regarding distribution, for the purpose of determining 
what economies could be obtained by centralizing distri^tion. ^ 

1 hrough the testimony of witnesses and private investigations data was 

S'froX^':; '^'T "''^'^'"^ """^ ''^ ^'^ ^°^^ C'*y -<i i- CO - 

pUed f rom 969 dairy farms concerning the cost of production 

Complete audit was made of the books of the Borden's Farm Products 

Co., Inc., through the ser^ces of Herbert B. Hawkins, a certified accountant 
The conclusions reached as a result of this investigation are as follows: 

4. Advance in the Price of Milk and Other Food Products 
In the City of New York the retail price of milk in bottles delivered to 
houses from wagons has risen from 9c. per quart in September, IpTrtol^^ 
per quart m October, 1917. ' 

don of' fo^^clJ: : ""'"'''" '"^'"^^^ '^^ ^^'"P^^^^ ^^^ ^^^--g tabula- 

From Jmie, 1914, to December, 1917, in the New York City market 
several food products have advanced in price a s follows : ' 

Commodities T„rj*?m4 t^^"^^,-. Per Cent 

r- June, 1914 Dec, 1917 Increase 

£ggs per doz TtTTj ZTTI — " ■ 

Com per bu ^^^ ^-^ 191 

Pork per bbl .....;..;; ,o?n c^'SS ^78 

Wheat per bu ^^'^ 50.50 159 

Sugar per 100 lbs ','.['.'. ^'S ^'^ ^51 

Oats per bu ^'^ ^-90 108 

Beef per lb .,'. S -^^ 96 

Cheese per lb 'if % , 77 

Butter per lb 'tS '^^^ 75 

Milk per quart '%, H 74 

'^ .14 55 



i 



13 

Milk, therefore, has not been alone in its rise in price and has risen to 
a much less degree than nine other important food products. 

The bulletin published by the Bureau of Labor Statistics of the U. S. 
Department of Labor in November, 1917, entitled " Prices and the Cost of 
Living," gives a comparative table showing the average prices of food on 
September 15th of each year from 1913 to 1917, of which the following is 
an extract : 



... Per Cent 

Article Unit Sept 15, 1913 Sept. 15, 1917 Increase 

Sirloin Steak lib. .262 .333 27.1 per cent 

Bacon lib. .281 .442 57.3 per cent 

Eggs 1 doz. .375 .525 40.0 per cent 

Flour lib. .033 .073 121.0 per cent 

Corn Meal lib. .031 .082 164.5 per cent 

Sugar 1 lb. .057 .098 71.8 per cent 

Milk 1 qt .089 .118 32.6 per cent 

For the same period in New York City the following figures are given : 

A . , Per Cent 

Article Unit Sept. 15, 1913 Sept. 15, 1917 Increase 

Sirloin Steak 1 lb. .264 .368 39.4 per cent 

Bacon lib. .262 .440 68.0 per cent 

Eggs 1 doz. .442 .592 33.9 per cent 

Flour lib. .032 .079 147.0 per cent 

Corn Meal lib. .034 .076 123.5 per cent 

Su»ar lib. .051 .092 80.4 per cent 

Milk 1 qt. .090 .124 37.8 per cent 

The average percentage advance in the retail price of the six food 
products other than milk shown in the above tables was 80.3 per cent for 
the country at large and 82.0 per cent for New York City. The price of the 
six commodities thus advanced 2}^ times as much as milk in the country at 
large and 2%o times as much in New York City. 

The rise in the price of milk in New York City since September, 1916, 
including both the prices paid to the producer and the prices at which milk 
was sold to the constmier, are shown in the following table expressed in 
cents per quart: 

Dealer Received 

Dealer / * ^ E>ealer's 

Period Paid Retail Wholesa le Actual Margin 

September, 1916 3.46 9 6 7.32 3.86 

October, 1916— January, 1917, 4 mos. 4.67 10 7 8.32 3.65 

Feb.— June, 1917, 5 mos 4.52 11 8 9.32 4.80 

July, 1917 4.84 11^ 8^ 9.82 4.98 

August and September, 1917. 5.94 12j^ 9 10.54 4.60 

October, 1917 7.46 14 10 11.76 4.30 

In the above tabulation the actual money received by the dealer is shown 
in the 4th coliunn and is made up from averages allowing 56 per cent of the 



% 



I 



14 

S '::£^^t]:tx '- "^"^^ -- -^^ ^ p^^ «- of the supp,, 

a fmction less than the r^r lIT P"'" "'^'^^^^ ^"^ ^h^'esale milk 
are discounts and losseVSte reSuottlftLT' " t "'l™^"- *«* 
retai^rice received a faction ,.s int%SrtS, ;t ^^ ^^^'^^"^ 

deaieS^a^trz iSc:^^ rhTpr-^ ^^ f -'- - -^ 

th^assumption that aH Z^ -^ rh^sa^^ i^S If^i^L"^ 

Questionnaire to 123 Cinre »^^. ^ 

^° '^ ^'™s R«5>«DiNG THE Rise IN Milk Prices. 
An inquiry was sent out to 123 riHw ,„j •• 
66, including New York City. ' ^'^'"'^* '^^''^ '«="v«<l from 



cw.-. W f n^o^^ ^„ o.,,^, m,. ,« 0„.»„, ,<,„. 



Price, 
Oct, 1916 




10 11 



12 



Price , October, 1917 
14 



6 

7 

9 

10 :;;;;;;; 

12 

*«^ 

14 

Wot given. 

Total.. 



1 

• • 

4 




1 

3 
3 
1 



1 
1 
4 
8 



5 
5 



8 14 



2 

12 



• • • . 






4 

5 6 ;: ;• •• 
3 1 ;: V • 

• 2 1 i i ; 




i 


• • • . . 

• • • 

• • 





12 



1 

2 

8 

16 

25 

4 

5 

1 

1 

2 



1 65 



1917. ^ ^' °*^ ~''^* show the higher prices paid in 

list of The^efpa;JnV?? S'rZrtI* *! 'Z'^t ^* ^'''^ ^-'^' ^^ ^ 
list shows that 4Ss paM oTin ^91^ ^ v ' "^"'"^ "'"^ '" ^^^7. This 

paid lie. in 1916, i^i^l ^u"o\ tll'T "^"^ '^^ '" '^'^ ^^ ^ «««» 

, giving a loiai ot 1^ cities now paving 14c n*»t. /i«o,^ 



15 

From this same inquiry facts were secured as to the prices paid to dairy 
farmers by the distributor, compared with prices paid by the consumer to 
the distributor. Results of this inquiry are shown in the following table : 

Price of Milk Per Quart Paid by Distributor and by Consumer, October, 

1917. 













Paid by Consumer 










Paid by 
Distributor 


— *^^—^ 










... A. 














10 


11 


12 


13 


14 


15 


16 


17 


18 


19 


20 


^ 
Total 


4K 




• • 


• • 




• • 














1 


5 




• • 


• • 




• • 














1 


5H 




• • 


• • 




• • 














1 


6 




1 


1 




1 














4 


654 




3 


3 




• • 














7 


7 




4 


5 


5 


2 














16 


7H 






4 


4 


4 


2 












14 


8 








1 


2 


1 












4 


8H 








2 


2 


2 












6 


9 










1 


3 












4 


9J4 












* * . 












• • 


10 












1 


i 




i 






3 


10J4 
























« • 


11 


























1154 
























• • 


12 


























12H 
















1 








1 


13 
























• • 


13^ 

14 

14H 
























• • 
























• • 

• • 


15 






















1 


I 


No Distribu- 


























tor 


• • 


• • 


1 


• • 


• « 


• • 


• • 


1 


• • 




• • 


2 


Total... 


5 


8 


14 


12 


12 


9 


1 


2 


1 




1 


65 



From the above tabulation it appears, for example, in column No. 4 
that in fourteen cities the consumer pays 12c. per quart for retail bottled 
milk. In one of these, farmers receive 6c ; in three, 6j4c. ; in five, 7c., and 
in four, 7j4c. 

In twelve cities where milk retails in bottles at 14c. per quart, the pro- 
ducer received the following amount : In one city 6c., in two cities 7c., in 
four cities 7j4c., in two cities 8c., in two cities 8j4c., in one city 9c. per quart 

In sixteen cities producers received 7c. per quart, in fourteen cities 
7j4c. 

It must be remembered that all milk is not sold in bottles at full price 
The milk sold at wholesale in cans usually is greater in amount than the 
bottled milk. The wholesale milk sells from 3c. to 4c. per quart less than the 
bottled milk. 

In the same inquiry there was represented a total population of 
21,067,496 people, and the total daily consumption of milk was 6,244,560 
quarts, or a little more than three persons to each quart of milk. 



.11 




r 




) 



16 

The retail prices, daily consumption, and other statistics of the milk 
supply of 66 cities is given in the following table : 

Milk Prices and Per Capita Consumption in 66 Cities (Total Population 

21,067,496). 



Retail Price Per Capita 

(Cents, No. of Daily Per Per Consumption 

Per Quart) Cities Consumption Cent Population Cent (Quarts) 

(Quarts) 



10. 
11. 
12. 
13. 
14. 
IS. 
16. 
17. 
18. 
20. 



5 


145,800 


2.3 


700,019 


3.3 


0.208 


8 


505,000 


8.1 


1,838,208 


8.7 


0.275 


14-<2)* 


2,420,120 


38.8 


6,296,146 


29.9 


0.385 


12 


840,640 


13.4 


3,381,608 


16.1 


0.248 


13-(1)* 


2,210,000 


35.4 


8,072,932 


38.3 


0.274 


9-(3)* 


112,000 


1.8 


674,168 


3.2 


0.166 


1-(1)* 












2 


11,000 


.2 


104,415 


.5 


6.i66 


1-(1)* 












1-(1)* 













Total... 66— (9)* 6,244,560 100.0 21,067,496 100.0 0.296 

^Figures in parenthesis indicate number of cities in each class from which no reply 
as to daily consumption was received. The per capita consumption is calculated from 
cities giving daily consumpticoi. 

From the above tabulation it appears that 38.3 per cent of the popula- 
tion lives in cities where the retail price for bottled milk is 14c. per quart ; 
29.9 per cent of the population pays 12c. per quart for bottled milk and 16.1 
per cent pays 13c. per quart for bottled milk. 

5. Statistics of the Milk Supply of New York City. 

The following statistics give figures for the month of October concern- 
ing the milk supply of New York City. These figures were supplied by the 
officials of the New York City Department of Health : 

Dairy Farms 30,934 

Milk shipping stations 800 

Dairy cows 400,000 

Milk received . November 1,627,127 qts. daily 

New York State supplies 1,402,277 qts. daily 

Pennsylvania supplies 114,630 qts. daily 

New Jersey supplies 58,100 qts. daily 

Vermont supplfes 36,120 qts. daily 

Connecticut supplies 9,000 qts. daily 

Massachusetts supplies 4,000 qts. daily 

Canada supplies 3,000 qts. daily 

Milk sold in bottles from wagons " 598,671 qts. daily 

Milk sold in bottles from stores 105,647 qts. daily 

Milk sold in cans from stores 710j654 qts. daily 

Milk sold in cans to manufacturers 185,750 qts. daily 

Retail dealers 350 

Retail wagons 4,978 

Wholesale wagons 1,522 

Grade A Raw Milk 50,000 qts. daily 

Grade A Pasteurized Milk 170,370 qts. daily 

Grade B Pasteurized Milk 1^80,360 qts. daily 

Grade C Milk None 



17 



New York Prices— Grade " B " Milk, 



Dates 



Price Per 
100 Lbs. 



Price Per 
100 Lbs. 



Price Per 
100 Lbs. 



October . 
November 
December 

January . 
February 
March . . . 

April 

May 

June 

July 

August . . 
September 



1915 

$1.76 
2.00 
2.00 
1916 
1.94 
1.88 
1.76 
1.53 
1.41 
1.29 
1.47 
1.65 
1.72 



1916 

$2.30 
2.40 
2.40 
1917 
2.35 
2.30 
2.25 
2.20 
2.15 
2.05 
2.25 
2.70 
2.70 



1917 



$3 

3 
3 



30 

54 
30 



Prices prior to October, 1916, are actual prices taken from " The Milk 
Reporter." Prices beginning October, 1916, are Dairymen's League prices 
with premium added for butter fat content of 3.5 per cent. 

This premium was 3c. for each Ko per cent butter fat over 3.0 per cent 
from October, 1916, to September, 1917, inclusive, and 4c. for each Ko per 
cent beginning October, 1917. 

Rise in Prices Paid Producers. 



Date 



October, 1915 

October, 1916 

October, 1917 '.'.'.'.'.'.'. 

Total increase 



Price Per 
100 Lbs. 



Price 
Per Qt. 



$1.76 
2.30 
3.30 
1.54 



$0.03782 
.04946 
.07096 
.03314 



6. Value of Milk as Food. 

Prof. Henry C. Sherman, in his book entitled, " Chemistry of Food and 
Nutrition," shows the cost of 3,000 calories of energy when purchased in 
the form of various food products : 



Foo<l Per Lb. 

Clear Fat Pork $o.20 

Bacon 25 

Round Steak plus Fat 20 

Round Steak Lean '20 

Eggs (8 at 36c. per doz.) 24 

Oysters (at 30c. qt, 1 pt.) .15 

Milk— 1 pt. at 6c. qt 03 

Milk— 1 pt. at 8c. qt '04 

Milk— 1 pt. at 10c. qt *.* qS 



Cost of 
3,000 Calories 



$0.16 

.27 

.88 

1.26 

1.13 

1.90 

.28 

.37 

.46 



X 



;^ 



> 




#i 



% 



18 

In reviewing these figures, Professor Sherman shows that people can 
afford to pay 20c. per quart for milk if they can afford to pay 25c. per 
pound for beef. The above statement is limited strictly to the food value 
of milk from the standpoint of calories. 

At the New York prices for September, 1917, for all products but milk 
and the October price of 14c. for milk, the same table would be as follows : 



Food 



Price 
Per Lb. 



Cost of 
3,000 Calories 



Fat Pork 

Bacon 

Steak plus fat 

Steak, lean 

Eggs, 8 at 60c. dozen. 
Milk (14c. qt.) 1 pt.. 



$0.39 
.44 
.37 
.37 
.40 
.07 



$0.31 

.48 

1.63 

2.33 

1.88 

.65 



Prof. M. J. Rosenau, of Harvard University, states that the value of 

milk is as follows: 

2 large ^gs, 

a large serving of lean meat, 

2 moderate-sized potatoes, 
5 tablespoonf uls of cooked cereal, 

3 tablespoonfuls of boiled rice, or 
.2 slices of bread. 



A glass of milk is about equal to 



From the U. S. Department of Agriculture another method of tabulating 
the food value of milk is as follows: 



Milk at— 



Is as Cheap 
as Sirloin Steak at 



Or Eggs at 



7 cents 

8 cents 

9 cents 
cents 
cents 

15 cents 



1$ 



a quart 
a quart 
a quart 
a quart 
a quart 
a quart 



a 
a 

a 



16.3 cents 

18.6 cents 

21.0 cents 
^ -, 23.3 cents a 'po,und 
^*'*'27.9 cfeits a pound 

34.9 cents a pound 



pound 
pound 
pound 



17.6 cents a dozen 
20.1 cents a dozen 

22.6 cents a dozen 
-/^S.l c^nts a do^^en 

*^*'*30.2 cents a dozen 

37.7 cents a dozen 



Concerning the food value of milk. Professor Sherman points out that 
it is a superior food in three respects, as follows: 

(1) Its food value in protein, carbohydrates and fats was partly 
realized a few years ago. 

(2) Its very exceptional value as the means of keeping a proper 
balance in the mineral constituents in a diet. (This refers to the salts 
of several kinds contained in milk.) 

(3) That it contains two growth-promoting substances called 

vitamines. 



19 

Concerning the last item of value mentioned above, namely, the vita- 
mines, most important and interesting discoveries have been made in the 
last three years. The most recent work has been performed by Prof. E. V. 
McCollum, of Johns Hopkins University, who has followed up the work 
begun by Professor Osborne, at Yale, and others. 

These discoveries show that there are existing in milk and in some other 
foods, two unknown substances which stimulate growth. One of these is 
found in the fat and the other is found in the water, or solution. Their 
chemical character is unknown and they have never been separated from the 
food materials with which they are associated. 

Professor McCollum has pointed out that the seeds of plants are good 
food so far as they go, but that they are deficient in these growth-promoting 
substances, which are found chiefly in the leaves of all trees and plants. 
They are found in such leaves as cabbage, lettuce, spinach and cauliflower, 
and above all in milk. 

Concerning milk and milk products, he says it is not generally appreci- 
ated that these articles have a dietary value far greater than can be expressed 
by their protein and energy contents. 

In experiments on rats, Osborne, Mendel and McCollum have shown 
that the feeding of butter fat and of milk promotes growth in a remarkable 
way for the reason that the vitamines or growth-promoting substances are 
present in milk in an abundance and in a form which is readily available, 
as in none other of our common foods. 

Because of its nutritional value and particularly because of its growth- 
promoting value, milk is the ideal food for infants and children. 

In testifying before the Committee, Dr. L. Emmett Holt, one of the 
leading specialists in children's diseases, stated as follows : 

" For infants during the first year a quart of milk a day is 
, necessary. For the second year, a pint and a half. There is no food 
as economical at present prices for the nutrition of infants as milk. 
♦ * * The habit of giving tea and coflFee to young children is 
positively injurious. For children between the ages of two and six 
years, the daily ration of milk should be one pint per day as a 
minimum. 

" Dr. Lucas, of Berlin, found very greatly increased susceptibility 

to tuberculosis as a result of under-feeding particularly among chil- 

■ dren. I should think that after six years 6( age up to twelve or 

thirteen years, a pint of milk a day ought to be allowed to all children." 

Professor Sherman, in his testimony, said:^ 

" We cannot expect a good community dietary if that community 
uses less than one-half quart of milk per capita per day. Unless 
there was that amount of milk, the dietary would be seriously one- 
sided. The milk has exceptional value as a food for growth due to 
the so-called vitamines * * * It is the most important single 



*•, 



111 



1 1^ 



i 



III 



.III' 



food for adults. It ,s more economical to produce than meat. A man 
confined to a bread and meat diet will show deficiencies, while a man 
confined to a corresponding bread and milk diet will go on indefi- 

rS / -it ^,,^^^^^^^^^ ^iet will always be improved by an 
addition of milk. If ,t was a question of one or the other, I think it 
important that a man have milk rather than meat." 

Prof. Graham Lusk, in his testimony, says: 

1 /If "" ^^""'^^ ""^ ^""^ '^'^''^^ ^"^ "^^^t "ntiJ they have bought at 
least three quarts of milk. Milk contains not only protein of animal 

ongm but also a very vauable fat which has specific properties for 
growth. It also contains in aqueous solution materials which prevent 
the development of beri-beri and pellagra. Milk is the cheapest form 
of protein you can get. It is the most complete and sufficient food 
that can be had Around the dairy farms centres the proper nutri- 
tion of a nation." ^ ^ 

How much milk should be used for drinking purposes by New York 

lSc thi (^r "'' u' ^"^"^^^^^/^^-'"'"ended by Professors Sherman and 
Lusk, the City would consume the following amounts daily : 

Quarts of Milk Which Should 

Afi^e Population ^ Used a Day ^ 

Each All 

Under 1 year 130,500 11 7;77Z, 

1—2 years ^?fi7f^ /,w ^x , 130.500 

2-6. 6-14 years. . . . i .' i .' ' • 1 387 900 iY"^ ^ll Yi ^^'^ZS 

Over 14 years 4 092 392 /i^ 1 ^^\ 3 ^^^'^SO 

^'"^^"^^^ O glass) H 1,023,098 

Total S 737 40? 

^'^-^^'^^^ 1,942.573 

Milk which New York City should drink-1, 942,573 quarts d^ 
Actual amount used for drinking is probably about 707,486 quarts daily. 

The food value of milk has been unappreciated by the public at lar^e 
While as a food for babies it is well known, it has been thought that i was 
not adapted to adults on the supposition that it contained less LnS^^^^ 
materials than the so-called solid foods. Solidity in food is a merfinSS 
due to the presence of fibre which holds vegetable and animal substrnces in 

can be assimilated. The liquid character of milk simply means that it isl 

Tnfan™ " """' """' ^'^''''' '"' '^^^"^^^^^^ ^^ ^^^''^^ -^ well Is] 

For infants it is not merely a convenient food, but, because of the ores 
ence of the so-called vitamines or growth-stimulati^g substances it s" 
vitally necessary for the development of infants and children. Its value as 



m 



21 

a food for adults is just beginning to be appreciated. It furnishes to the 
body those materials which are most necessary for the increase of strength 
and endurance. 

It is believed by those who have investigated the subject that the nations 
and races of men which have done most in the development of the world 
and have shown the greatest physical strength and vigor are those nations 
which have depended to the largest extent on dairy products and milk for 
food. 

At 14c. per quart milk is the cheapest of animal foods. Even up to 20c. 
per quart milk can compete on favorable terms with any animal food at 
present prices. 

The population of New York City may be divided into certain age 
groups showing the number of infants and children and the number of per- 
sons of each age in ten-year periods from one year of age to more than 
seventy-five years of age. The quantity of milk used as a beverage, or for 
drinking purposes, is 707,486 quarts out of a total supply of 1,600,723 quarts, 
the diflFerence being used for cooking and manufacturing purposes. The 
testimony of Dr. L. Emmett Holt and Prof. Graham Lusk before the Com- 
mittee showed how much milk should be used by infants, children and adults 
for drinking purposes if they are to secure the greatest benefits from milk as / 
an article of diet. The quantity of milk which should be used as a beverage ^ 
is 1,942,573 quarts daily, that is to say this quantity should be used as a 7 
beverage in addition to the quantity used for cooking and manufacturing \ 
purposes. The above facts are shown in the chart on page 22. 

The upper line of this chart shows the population of New York City 
according to the different ages. It is notable that between the ages of 20 
and 25 years there is a high point due to the young aduHs of both sexes 
who come to New York both from the rural districts in America and from 
foreign countries. The lower line in the chart shows the amount of milk 
used as a beverage at the present time by this population. The middle line 
shows the quantity which should be used if the people consumed milk as an 
article of food in the quantities which the scientists state could be used by 
them to best advantage. The difference between these two lines shows how 
much should be added to the present milk supply to satisfy the needs of the 
population if milk were properly used for drinking purposes. 

7. The Effect of Prices on Consumers. 
The price of milk is of vital importance to infants and young children. 
Older persons may exercise choice and select their foods, but infants and 
children have no choice and are dependent upon milk. When children under 
two years of age are deprived of milk and placed on a diet of other food they 
do not thrive. High prices in New York City during the past year have 
resulted in changing the diet of young children in the poorer parts of the 
city from milk to other things, or from milk of high grade to milk of lower 
grade, with consequent injury to their health. 



I 



\ \ 



22 



-I 



-J 






^ !ii 






'f,00^ f^f- 






5 

^ 

^ 



23 

Reduction in the Quantity of Milk Consumed. 

A milk census taken in October, 1916, shows the city was using 1,900,000 
quarts of milk a day. Similar census taken on October 5, 24 and 25, 1917, 
showed, respectively, 1,411,658 quarts, 1,576,723 quarts and 1,531,968 quarts, 
indicating shrinkages of 26.7 per cent., 17 per cent, and 19.4 per cent. 
Statistics from large companies show decreases for October, ranging from 
50 per cent, to 11 per cent., in various districts of the city. These shrinkages 
in the amount of milk consumed are undoubtedly due largely to the advances 
in price which have recently occurred. 

A survey was made by Bailey B. Burritt, Director of the New York 
Association for Improving the Condition of the Poor, of 2,200 families in 
various parts of Manhattan and Brooklyn. This survey required 250 investi- 
gators, composed of persons in the employ of the Association for Improving 
the Condition of the Poor and health nurses of the City Department of 
Health. This survey is summarized as follows: 

Survey Made Jointly by the Department of Health and the Asso- 
ciation FOR Improving the Condition of the Poor for 
THE Mayor's Committee on Milk. 

(October, 1917.) 

Selection of Families for Milk Survey. 

Aim — To get some light as to how families living on a very narrow 
margin are meeting the increased cost of milk. 

Method of Investigation — Schedules were placed in the hands of inves- 
tigators, who made a house to house canvass of a particular selected section. 
Only such families as had at least two children under six years of age were 
considered, and all families under the care of the Baby Health Stations 
or receiving milk from a relief organization were eliminated. 

Investigation— BodiTd of Health Nurses, settlement workers and 
A. I. C. P. field workers made the survey. 

Locations— E3ich investigator was sent to a selected section and told 
to canvass each house. Since there were 250 investigators, it is felt that 
the whole city is quite well represented. All boroughs were represented. 
In Manhattan representative sections are Cherry, Mott, Henry, Allen, 
Warren and Christopher Streets, and 99th to 105th Streets from the East 
River to Third Avenue, 53d to 66th Street from the Hudson to 10th 
Avenue. Corresponding sections in Brooklyn are Hicks and Bond Streets, 
Greenpoint, Metropolitan and Thatford Avenues. In the Bronx, Washing- 
ton Avenue and Lorillard Place ; Rockaway Avenue in Jamaica and Spruce 
Street in Richmond Hill. 

The survey was made during the week of October 9, 1917. Of the 
2,500 schedules sent out 2,200 were used in the tabulation of results. 



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24 

MILK SURVEY (OCTOBER, 1917). 

Amount of Milk Purchased, with Changes since 1916. 
Number of families, 2,200 (each containing two children under 6 years). 

Members of 2,200 families • • . • 12.439 

Adults 4,467 

Children from 6-16 2,534 

Children under 6 years 5,438 

Milk purchased in 1916—4,797 quarts daily 

Milk purchased in 1917—3,193 quarts daily (141 cans condensed milk) 

Difference 1,604 quarts daily 

Estimated milk needed by 12,439 people- 
Children under 6 years (1 quart each) 5,438 quarts 

Children from 6-16 (H Quart each) 1,267 quarts 

Adults one-third quart each 1,489 quarts 

8,194 

Details with regard to changes in milk supply from October, 1916, to October, 1917. 

Number of families getting more milk 121 

Number of families getting same amount 599 

Number of families getting less 1.480 

Number of families getting more condensed milk, 420. 

Families cutting milk supply— 

25 per cent, or less 219 

25-50 per cent ?69 

50-75 per cent 169 

75-99 per cent 3 

100 per cent 120 

1,480 

(Of these 120 families dropping milk entirely, 73 substituted condensed milk.) 

Families buying from 

}4 to 1 quart less 863 

1 to 2 quarts less 449 

2 to 3 quarts less 131 

3 to 4 quarts less 31 

4 to 5 quarts less o 

Of the 1,480 families getting less milk, 1,213 are substituting tea and coffee. 

Families changing from Grade A to B 266 

Families changing from Grade B to C 67 

Families changing from bottled to loose 474 

Families with babies less than 1 year old 982 

Of these 982 families 

Those buying less milk than in 1916 562 

Those buying same amount of milk 316 

Those bu3nng more milk 79 

Those dropping their milk entirely 25 

982 

Mothers' statements — 

In 829 families, where milk has been decreased, the mother states that the children 
arc cither losing weight, or are not gaining. In these 829 families there arc 2,090 
children under six years of age. 

Tea and Coffee— 

2,148 children under six years of age are drinking tea and coffee. 



25 

Nationalities Represented. 

Italians 725 

Americans (colored, 73) 497 

Jewish 416 

Germans and Austrians 220 

English, Irish and Scotch 185 • 

Slav 93 

Orientals 40 • 

Danish, Swedish and Norwegians 12 

French 6 

Spanish 4 

Hollander » 1 

Greek I 

Concerning this survey, Miss Gillette, who had direct charge under 
Mr. Burritt of compiling the results, testified before the Committee as 
follows : 

" The sections in which the investigations were made were on the 
lower East Side, such streets as Cherry, Mott, Henry, Allen, Warren and 
Christopher, and from 99th to 105th Streets, from the East River to Third 
Avenue, and oh ihe West Side, from 53d to 66th Streets, and correspond- 
ing sections in Brooklyn, such as Hicks and Bond Streets, Greenpoint, 
Metropolitan and That ford Avenues, and corresponding sections in the 
Bronx, as Washington Avenue. 

" We have eliminated all families in which there were not two children 
under 6 years of age. This study is based on 2,200 families. There were 
5,438 children under 6 years of age. Between 6 and 16 there were 2,534 
children. 

" 121 families were getting more milk than in October, 1916. 
" 599 families were getting the same amount of milk. 
" 1,480 families were getting less milk. 
" 219 families have cut their milk supply 25 per cent. 
" 969 families were getting 25 to 50 per cent. less. 
" 16l& families were getting from 50 to 75 per cent. less. 
• " 3 families were getting from 75 to 99 per cent. less. 
" 120 families were getting 100 per cent. less. 
" 982 families had children less than one year of age. 
"2,148 children under 6 years of age were using tea and coffee 
as substitutes for milk." 

Increased mortality from diarrrheal diseases was noted in New York 
City for the months of August, September and October. A survey of 
other cities in America shows that in the majority of them there was a 
similar increase in deaths among babies from diarrheal diseases. A similar 
experience has occurred in foreign countries where, because of war condi- 
tions, infants were deprived of milk, and the resulting increase in the death 
rate was promptly checked as soon as relief organizations arranged for an 
adequate milk supply, for mothers as well as for infants. There is no doubt 
of the fact that high prices and the shortage of milk have a direct effect on 
infant mortality. 









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26 
8. Cost of Production. 

.v.;>B. CO., of n,ilk producL u^E pS, Zd ,"J S IT^ 

piled includes fi^rp«; fmm o^a a - / . ^""^'"^"s. ihe data com- 

milk to New YoA atv Offl , *?"^ ^uT '" *" ''^ '''^'^ contributing 
of these Sut^tmaed^Ss' 31?^^°^'^""'^*'^ "^^'^^'^'^ 

ants se^ired fig^rel^t first L„h f°'""""'='^^ °^" S'""? ^^ *«P«« ^cco^r^X- 
showcostsranS?;l^irr,rn;^tir-^^^^^^ 

chartf?i::r:?cs:ur.t^;^s^^^^^ ^Vt^h^ "r 

were presented in tabular form as foIlowT: ' "^ *•"' '*='"'*' 



Item ^nIT' ^■'S''"',"" Producer 

Feed ~ ■ ■ 

Labor $f9-40 $51.54 $68 00 

Overhead ^^■^^ 18.15 «^ 

1^-82 23.22 49;00 

Credits $86.94 $92.91 U^l^ 

^" O 21.00 20.00 

Net cost per year. , 

Production per cow..:; .■.■.■;.■ *? iSt .k ^h?^ $142.00 

Cost 100 lbs. milk .;.::::: .i^s-m?""- .,?;^??"'^- soooib,. 

Cost per quart *«„, $1.0911 $1,775 

-^^^ ^ ••■ 0332 _^^^(g^ 038S 

range'EtcS'iSl^^s "^^Xtd7r;i T^^T^ 
many cows in New England producTe u^der V^ T ""' *"'" "* 
exceeding doubtful if Lst ^wsT^ew £2^°" ' ^\ ''^'- '' '^ 
more than 3,500 to 4,000 poundlper year ^ """ '"■°*^"*='"S "'"*='' 

The above tabulation is objected to by the Wicks Committee, on the 



27 

ground that the items for labor are not large enough to cover the cost of 
labor in New York State. It is to be noted that in the year 1914 the cost 
of producing milk was less than 4 cents per quart in cows producing more 
than 5,000 pounds of milk per year. These costs, however, are figured on 
the costs of feed and labor in 1914, which were much lower than similar 
costs at the present time. 

The Wicks Committee gathered information from a large number of 
dairy herds in groups and in individuals, in order to ascertain the cost 
of producing milk previous to October, 1916. Among these was mentioned 
statistics from 174 herds, including 5,308 dairy cows, Delaware County, 
New York, including the statement of the amount of grain, silage, hay, 
pasture, labor and miscellaneous costs necessary for maintaining one cow for 
one year during the years of 1911-1913, inclusive. 

Similar figures were gotten from the herd of cows at St. Lawrence 
University, New York, from 42 herds in Oneida County, New York, from a 
dairy herd at Cobleskill, New York, and from the tabulation made by 
Professor Larson of Columbia University. The results of these investiga- 
tions were as follows: 



Cost Per Cost of Cost Per 
No. of No. of Cow, Per 100 Lbs. Qtof 
Source Herds Cows Year of Milk Milk 

Delaware Co.. N. Y.. 174 5,308 $110.75 $1.55 $0.0335 

St Lawrence University, N. Y. 1 20 127.75 1.784 .0375 

Oneida Co., N. Y 42 751 111.26 2.167 .0466 

Cobleskill. N. Y 1 .... 116.64 

Prof. Larson. Columbia Uni- 

versity, N. Y 127.75 1.784 .0375 

At the time the above figures were compiled the cost of grain was 
$32 per ton, hay $18 per ton, silage $5 per ton, labor 20c. per hour. Most of 
these costs have advanced from 50 to 100 per cent since that time. 

Regarding the amount of milk produced by cows in the State of New 
York, the Wicks Committee came to the conclusion, after six months' 
investigation, that "the average production of all enumerated dairy cows 
of the State of New York approximated 4,000 to 4,500 pounds of milk per 
annum." The cost of keeping a cow does not increase at the same ratio as 
the quantity of milk produced increases. For example, from the Wicks 
Committee report the following figures are taken : 

Cost Per Cow Production 

$107.67 4,695 lbs. 

124.63 5,896 lbs. 

150.75 8.500 lbs. 

Concerning the prices paid to the producer, the report of the Wicks 
Committee says : " Up until the month of October, 1916, the price to be paid 
to the producer was largely determined and controlled by the price which 
the consumer was in the habit of paying * ♦ * in the large cities. 



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In other words, the consumer * ♦ ♦ had become accustomed to pay 
a certain price for a bottle of milk in the same way that he became accus- 
tomed to the payment of the street car fares * * *. An attempt to 
increase the customary price was followed by organized resistance * * *. 
The result was that in determining what price should be paid to the dairymen 
no heed at all was paid to the actual factors of cost." 

As to the necessity for high prices the Wicks Committee report says : 
" The demands of these dairymen were based upon necessity. The general 
public and the buyers and everyone familiar with the facts by that time 
conceded the justice of the demand. Above all, their demands were 
reasonable. 

" The increased price proposed by the dairymen was nearly four times 
the average profits of the previous year (of the distributors). To pay this 
increased price meant necessarily an increase in the price to the con- 
sumer ♦ ♦ ♦. 

"The Committee believe that up to this time the State has entirely 
neglected by any competent officer or body to supervise, control or aid in a 
situation like that shown to exist. 

"The State has made it dangerous for the distributors to meet the 
organized dairymen upon common ground * * ♦." 

Cost of Production, 1916-1917. 

Concerning the cost of producing milk in the State of New York in 
the year 1916, the Committee received testimony from the officials of the 
Dairymen's League and Prof. G. F. Warren. Mr. Cooper, the President of 
the Dairymen's League, said : " The cause of high prices is that the price 
of feed is rapidly increasing and also the price of labor ; ♦ ♦ * our most 
reliable figures are obtained from the College of Agriculture, that is by Prof. 
Warren. 

" The formula contained in these papers (from Prof. Warren) was used 
as a basis for price fixing by the Board of Directors of the Dairymen's 
League and representatives from the different branches. The general 
result of formula is, labor 3 hours, grain 30 pounds, hay 60 pounds, silage 
1 10 pounds, plus 29 per cent, and a credit of 1 1 per cent. That was worked 
by filling in the blanks in the formula with current prices, as follows : 

S^*»" $54.60perton 

|?fy 12.00perton 

Silage g.OOperton 

" The particular price arrived at by the Dairymen's League was $2.97 
per hundred pounds. This was multiplied by 111.9 per cent, to get the orice 
for October." ^ 

Prof. Warren stated in his testimony that "the standard amount of 
time recognized for taking care of one dairy cow is 150 hours per year; 
* ♦ * it takes practically one pound of grain for three pounds of milk." 



29 

Data was secured from herds from Broome County, N. Y., of 56 farms 
keeping 798 cows. These were farms with six or more cows, not selected. 
For the year ending May 1, 1915, these herds produced milk by months 
approximately as it was needed in New York City, as follows: 

New York Broome County 
Date City Supply H erds 

May, June and July 26.7% 27.1% 

Six months beginning October 1st. 47.8% 51.4% 

The formula from a study of these Broome County herds is as follows : 

To Produce 100 Pounds of Milk. 

Cost Items Amount 

Grain 26.6 lbs. 

Silage 96.1 lbs. 

Green feed 14.7 lbs. 

Dry forage , 73.3 lbs. 

Labor 3.38 hours 

" The prices of milk, figured on that formula, will come within 5 per cent 
of the price of milk based on all information available in the market ; * * ♦ 
this price is based on the average cow. The butterfat for Broome County 
was 4 per cent." 

Figures obtained from 21 New York farms keeping 386 cows in larger 

herds than the average, used to produce 100 pounds of milk, the following: 

Cost Items Amount 

Grain 29. 1 lbs. 

Silage— green food 109.4 lbs. 

Hay 49.4 lbs. 

Labor 2.37 hours 

" The cows average 6,446.9 pounds per year. The above costs amounted 
t o 8L3 per cent ; the butter fat was 3.5." 

Professor Warren gave his own summary of the data received from 
Prof. Frank App, of New Jersey, from the Connecticut Agricultural Experi- 
ment Station, Bulletin published in July, 1917, from the Massachusetts Agri- 
cultural College for sixteen years, from the Connecticut Agricultural Col- 
lege for five years, and from the New Jersey Agricultural Experiment 
Station. 

The average of all these figures is stated by Professor Warren in a 
formula which is as follows : 

Production per cow, 6,197.8 pounds of milk. To produce 100 pounds of 
milk it requires. 

Grain .• 33.1 lbs. 

Silage 97.2 lbs. 

Hay 61 lbs. 

Labor 2.83 hours 

The above costs equal t o 83.8 per cent of the total. 

The Professor stated that experiment stations are feeding a little on 
the side of diminishing returns, that is, they are overfeeding, while the 
farmers are getting more returns for feeding. 



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30 

Professor Warren submitted an exhibit showing the average investiga- 
tions published by Michigan, Connecticut and New York State Agricultural 
Colleges as a result of cost accounts compiled from six separate investiga- 
tions. From these he derived the formula of cost items in the production 
of 100 pounds of milk as follows : 

Grain 34.7 lbs. 

Hay 51.8 lbs. 

Silage 105.9 lbs. 

Labor 2.59 hrs. 

He assumed that the cost of these items was : labor 25c. per hour, grain 
$55 per ton, silage $6 per ton, and hay $15 per ton. This would make the 
average cost of 100 pounds of milk $2.94. 

If the figures for New Tersev are substituted for Michigan in this 
formula it makes the average cost $2.83 per 100 pounds. This_is 15c. i^er 
J 00 pound s below the cost of prod ucing m ilk in the wi nter dairies of 
Broome Cotin ty, New York . 

Professor Warren summarized the testimony by saying: 

" The Broome County figures alone to my mind are the best 
figures upon which to base conclusions." 

Concerning the price of labor, Professor Warren states : 

" The price of labor of 30c. an hour cannot possibly be used in 
this formula. If they (the Dairymen's League) used 30c. an hour 
(in arriving at their cost price) the price would have been higher 
than they get. We assume that (in the month of October, 1917), the 
cost of grain is $55 per ton, silage $6 and hay $15 and labor 25c. 
an hour. 

" Under these conditions the cost of producing milk at the present 
time (October, 1917) would be 73.3 per cent more than was received 
for milk in the years 1914 and 1915. You would arrive at a figure 
of $3.43 for 4 per cent milk this year. This formula (for Broome 
County, New York) represents a reasonable degree of good business 
management. The farmers are better than the average. The con- 
sumer would not be paying the cost of inefiiciency. The herds are 
larger than the average and labor is more efficient. If farms are 
well managed this already represents the application of that efficiency 
you wish to apply. ♦ ♦ * I believe that 25 per cent of the milk 
If produced for New York City is produced on probably as efficient a 
4| basis as this. 

• " There were on New York farms in April, 1916, 102,153 hired 

men. In April, 1917, there were 86,245 hired men." 

Mr. G. W. Bush, one of the statisticians of the Dairymen's League, 
testified that he had made calculations as to the cost of milk, using Professor 
Warren's figures and figures gathered from other sources. As the result of 




31 

these calculations he had come to the conclusion that the correct formula 
for the production of 100 pounds of milk is : 

Grain 34.7 lbs. 

Hay 51 .8 lbs. 

Silage 105.9 lbs. 

Labor 2.59 hrs. 

These mn^ttitntpH 7« 4 p^^ r^nt "^ ^^^ ^^^^^ ^f'llt 

He testified that the proper prices for these items for the month of 
October, 1917, were: 

Grain $55 per ton 

Hay $12 per ton 

Silage $5 per ton 

Labor 30c per hour 

This amounts to $2.93 per 100 pounds of milk, yielding 3.5 per cent 

butter fat. 

He stated that it costs five times as much to produce milk in winter 
as in summer and that if the yearly average cost of milk is $2.93 per 100 
pounds the price for October should be $3.23 per 100 pounds. 

He submitted a table showing the increase in the cost of grain as 
follows : 

Increase in the price of feed: 

— - " ■ ■ ~-^ 

Feed Oct.. 1916 Nov., 1916 Sept., 1917 

Gluten $35.57 $41.45 $57.00 

Bran 31.07 33.70 38.00 

Dry Grains' ;.'. '. 35.70 40.70 59.00 

Brewers' Grains 28.95 33.95 49.00 

Cotton Seed Meal 42.95 46.45 55.00 

Corn Meal 35.50 40.15 48.50 

Hominy Meal 39.20 43.70 62.00 

Average Prices 36.50 41.07 57.31 



Labor, the witness stated, could be obtained in 1916 at a cost of 20c. per 
hour. In the year 1917 this cost has increased about 50 per cent and the 
scarcity of farm labor is a most vital worry. 

During the past year the cost of cows has increased at least 25 per 
cent, utensils 33 to 50 per cent. 

In the summer of 1917 Professor Warren sent out a questionnaire to 
1,646 dairies owning 32,904 cows. Between April and August they sold 
1,836 cows. Of these 1,554 were good cows, sold because of scarcity of 
labor, high cost of feed, and low selling price of milk. 

Mr. Elbert S. Brigham, Commissioner of Agriculture of the State of 
Vermont, testified that the list of cost items in the cost of producing milk 
includes, cow, food, labor, buildings, equipment, miscellaneous, managerial 
ability and business risk. 

The present conditions of the labor market are such that 25c. an hour 
certainly is a conservative figure for use in computing labor cost. 



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Managerial ability is a cost item that must be recognized. A farmer 
who successfully conducts a dairy enterprise is justly entitled to something 
more than the regular wage, otherwise the boss stands on the same level 
as the hired man. 

The Federal Farm Management Experts of the United States Depart- 
ment of Agriculture state that 10 per cent of the total costs of conducting 
the business is a reasonable charge for managerial ability. 

The total costs in a survey of Vermont farms was for caring for one 
cow per year $123.74, consequently $12.37 is the proper charge to be allowed 
for managerial ability. 

Mr. Brigham submitted the following statement regarding the costs of 
milk production in Vermont: 

Summary of cost of milk production, May 1, 1916-April 30. 1917, on 
212 Vermont farms located in 12 counties. 

4,650 cows 5.328 lbs. (2,478 qts.) milk per cow 

Food Cost 
Per C/Ow 

Grain, 1,240 lbs. at $41.12 per ton $2'; 48 

Silage, 5,444 lbs. at $4.39. :. .'..*.'...'.'.'.'*.'.'"* 11 93 

Other succulents, 400 lbs. at $4.00 n an 

Hay, 3,500 lbs. at $11.94 '.'. .*.*.*.*.*.'.* .'.■.' .;;;.*;.'; ■ 20 93 

Other dry forage 51 

Pasturage V^V^'.\\'.V.V^'^'.V. 6^95 

Total food cost ^^ 

Labor Cost 

Man labor, 158 hours at $0219 $34 53 

Horse labor, 8 hours at $0.141 1.09 

Total labor cost $35.62 

Overhead Costs 

Interest on animal inventory ^ 44 

Bedding 1.'69 

Use of buildings 7.50 

Use of equipment !!!*.]..! 1 !.*!!! ! 1 12 

Bull service '..'.'.'.'...'.'.'.../.'.,'. 1 94 

Interest on feed inventory 0.86 

Miscellaneous costs 3^97 

Total overhead costs |21 52 

Managerial ability, business risks 12 . 37 

Total costs $136.11 

Average Returns Per Cow 
Increase value of cows $7 28 

j!^^nure ;..*;::::.*:::::;::: 12:96 

Calves 3 52 

Hide.« and feed bags 0.49 

Total returns for items other than milk $24.25 

Net cost of milk ($136.11— $24.25) %\\\ 35 

Total production, 2,478 quarts ..5,328 lbs. 



33 

After stating the actual costs as determined on Vermont farms from 
May 1, 1916, to April 30, 1917, Mr. Brigham submitted the following set 
of figures to show the probable cost of producing milk on farms in October. 
1917: 

Outline for Computing Cost of Milk Production 
Probable Cost October 1, 1917. 

Food Cost. 

Grain, 1,240 lbs. at $50.00 $31.00 

Silage, 5,440 lbs. at $5.00 13-60 

Other succulents, 5,440 lbs • • •! 

Green Oats, etc., 5,440 lbs "-^ 

Hay, 3,500 lbs. at $13.00 • 22.75 

Other dry forage (corn fodder, straw, etc.) "-^ 

Pasture ' '^ 

Total food cost $76.10 

Labor Cost. 

Man Labor, 159 hrs. at 25c $39.50 

Horse Labor, 8 hrs. at 18c I -^ 

Total labor cost 40.94 

Total overhead costs 1 c'Si 

Managerial ability, etc 15.01 

Total cost ; ^^JMJ 

Total returns other than milk 18.45 

Net cost of milk ^^^'^ 

Milk production, quarts «n nco? 

Cost per quart at farm $^*S^?c 

Cost per 100 lbs. at farm 2.75 

Prof. W. P. B. Lockwood, of Massachusetts Agricultural College, 
Amherst, Mass, presented a summary of figures obtained from 87 farms 
from May 1, 1916, to April 30, 1917, in the State of Massachusetts. 

Cows averaged 6,760 pounds of milk per year. The census figures show 
that for the State of Massachusetts the average is 4,700 pounds per year. 
The total cost per cow in the 87 herds was $201.36. Subtracting credits left 
$168.45, and adding 10 per cent for managerial ability makes $185.31, which 
is equal to .0618 per quart. 

A second set of figures shows the cost of producing milk from cows 
which produced only 5,005 pounds of milk per year to be .0724 per quart. 
Using the September, 1917, prices for grain, it makes the cost .0816 per 
quart. 

The cost of labor is 26.8c. per hour. Where the percentage of farm 
receipts for milk is less than 60 per cent, on 249 farms, the average labor 
income is $714 per year. Where the receipts for milk are over 60 per cent, 
on 135 farms, the average labor income is only $383 per year. In other 
words, the less the dairyman depends on milk for his income, the greater 
are the returns for his labor. 



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Tabulations presented by Professor Lock wood are as follows : 

Cost Last Year — Average Massachusetts Cow 
(Based on the group of records representing the average cow in Massa- 
chusetts showing cost for the year May 1, 1916, to April 30, 1917. Figures 
from 17 herds, 323 cows, having an average production of 5,005 pounds of 
milk per cow.) 



Items of Cost. 



Quantity. 



Price 
Per Ton. 



Peed — 

Grain 2,430 lbs. 

Hay 2,661 lbs. 

Salt Hay 718 lbs. 

Feed — 

Corn Stover 478 lbs. 

Silage 4,098 lbs. 

Green Feed 1,408 lbs. 

Pasture 



$37.69 
16.63 
10.00 

$7.65 
5.15 
3.96 



Total feed costs. 



Labor — 
Man hours . 
Horse hours 



150 hrs. 
9 hrs. 



(Per hr.) 
$0,268 
.207 



Total labor costs 

Other Costs — 

Depreciation on cows 

Interest on cows 

Taxes and insurance 

Veterinary services, drugs and disinfectants 

Bull service 

Use of buildings and water 

Bedding 

Use of equipment 

Ice 

Miscellaneous other 



Total other costs. 



Total all costs. 

Credits — 

Manure 

Calves 

Milk used on farm... 



8.1 Ton 
.85 Calf 
152 Quarts 



$2.05 
6.34 
.0494 



Total Credits 



Net Cost per cow , 

Managerial ability, business risk, and dairy overhead, 10%. 

Net costs — 

Final costs, 2,175 qts. milk 

Cost per quart wholesale milk. 

Receipts per cow 

Receipts per quart 

Loss per cow 

Loss per quart 



Total. 



$45.79 

30.44 

3.59 

$1.83 

10.55 

2.78 

5.47 

$100.45 



$40.20 
1.86 

$42.06 

$6.91 
4.90 
1.53 
.83 
3.40 
6.82 
1.01 
1.67 
1.23 
1.^31 

$29.61 

$172.62 

$16.60 
5.39 
7.51 

$29.50 

$142.62 
14.31 



156.93 

.0724 
112.28 

.0516 
45.15 

.0205 



Total miscellaneous for the 323 cows was as follows — Electricity for motors, $125 ; 
artificial light, $71; salt and stock feed, ^Z\ paid for hauling milk, $60; testincr. $55; 
association fees and dues, $29; fly spray, $5, and changing stock, $5. Total, $423. 




Cost of producing a quart of milk with the average Massachusetts 
cow was .0724. 

In general the dairyman is efficient If he was not so and there were 
large profits to be made in the milk business, capital from outside sources 
would be coming into the dairy business. There is no rush of capital to the 
dairy business taking place at present, notwithstanding the fact that we must 
have milk and dairy products. 

Professor Lockwood presented a second tabulation of costs using the 
prices for October, as follows : 

Cost per Cow. 



Items of Cost. 



Quantity. 



Price 
Per Ton. 



Total. 



Feed — 

Grain 

Hay 

Salt Hay 

Corn Stover 

Silage 

Green feed and other succulents. 
Pasture 



2,430 lbs. 
3,661 lbs. 

718 lbs. 

478 lbs. 
4,098 lbs. 
1,408 lbs. 



$56.00 


$68.04 


16.69 


30.55 


10.00 


3.59 


7.65 


1.83 


6.00 


12.29 


4.50 


3.17 




5.47 



Total feed costs. 



Labor — 
Man hours . . 
Horse hours. 



150 hours 
9 hours 



(Per hr.) 
$0,275 
.20 



Total labor costs. 



Other Costs— 

Depreciation on cows 

Interest on cows 

Taxes and insurance 

Veterinary services, drugs and disinfectants 

Bull service 

Use of buildings and water 

Bedding 

Use of equipment 

Ice 

Miscellaneous 



Total other costs. 
Total all costs .. 



$124.94 



$41.25 
1.80 

$43.05 



$6.91 
4.90 
1.53 
.83 
3.40 
6.82 
1.01 
1.67 
1.23 
1.31 

$29.61 
197.60 



Credits — 

Manure 

Calves 

Milk used on farm. 



8. 1 Tons 

.85 Calf 

152 Quarts 



$2.50 


$20.25 


6.34 


5.39 


.07 


10.64 



Total credits 



$36.28 



Net cost per cow $161 .32 

Managerial ability, business risk and dairy overhead, 10% net cost 16.13 



Final cost per cow, 2,175 quarts $177.45 

Cost in September, 1917, for producing milk in Massachusetts is .0816. 




I 



Nit !i 
liili 



* 



: 



II 



"Piii 



tit 



16 

Professor Lockwood also presented a set of figures showing how the 
cost of milk varies with the quantity produced per cow. 

Cost of milk with varying production. Cows vary from 5,105 pounds 
to 7,500 pounds per year. 

Cost of Milk With Varying Production, 

(Cost Per Cow.) 

Number of farms 17 52 18 

Number of cows 323 901 . 5 353 

Production Per Cow. 
Item of Cost. Less 5,501 lbs. 5,501-7,500 Over 7,500 lbs. 

^^feain $45.79 $50.81 $52.44 

Dry roughage 35.86 33.08 39.02 

Succulent roughage 13.33 18.98 22.89 

Pasture ....T. 5.47 6.25 5.76 

$100.45 $109.12 $120.11 

Labor — 

Man Labor: 

Hours 150 188 241 

Cost $40.20 $47.20 $64.44 

Horse labor 1.86 3.21 5.54 

Total labor costs $42.06 $50.41 $69.98 

Total other costs 29.61 36.30 52.11 

Total all costs 172.12 195.83 242.20, 

Total credits 29.50 29.59 44.44 

Net cost (cost minus credits) 142.62 166.24 197.76 

Managerial ability, etc., 10 per cent, of net cost 14.26 16.62 19.78 

Final cost per cow 156.88 182.86 217.54 

Wholesale milk sold, quarts 2,175 2,928 3,935 

Cost per quart 0721 .0624 .0552 

Prof. John M. Fuller, Professor of Dairying in New Hampshire Agri- 
cultural College, Durham, N. H., presented figures obtained from 200 farms 
in the cow-testing associations of New Hampshire, in which there were 2,597 
cows ; also reports from 100 farms in four other associations and additional 
data from 37 representative dairymen in the state. 

The average production of cows on the 200 farms is 5,944 lbs. per cow 
per year. The cost of producing milk on the prices of feed in the month of 
June, 1917, was as follows : 

Grain, .77 tons at $55.64 per ton ^$SJ 

Silage, 1.75 tons at $5 per ton 8.75 

Green feed, .27 tons at $4.50 per ton LS 

Pasture, June 1st to October 1st 6.00 

Hay, 1.65 tons at $13.19 21.17 

Labor, 205 hours at 23 cents an hour 47.15 

Delivery, 330 times • ; • • • 8.25 

Interest on investment plus insurance at 1 per cent, plus repairs and depre- 
ciation at 3 per cent. 

Housing (5 per cent, on $1,250) 5.63 

Bedding J.OO 

Depreciation (cows) ^ |'75 

Taxes and insurance (cows) 5.05 



37 



Bull, feed and expenses 

Ice, coal and wood 

Veterinary service 

Tools and utensils 

Cow Testing Association expense. 



4.35 

2.20 

.87 

.53 

1.50 



Total , $168.86 



Credits — 

13 tons manure. 

1 calf 

Feed bags 



$20.00 

5.00 

.40 



Total credits 



$25.40 



Net cost for keeping one cow one year $143.45 

Production per cow, 2,764 quarts ; cost per quart, 5.19 cents for milk averaging 3.5 per 
cent, butter fat. 

If these costs were applied to the average cow in New Hampshire pro- 
ducing 2,145 quarts of milk per year, the cost of production would be 6.6 
cents per quart. 

Labor costs $45.(X) per month, plus bed and room. This makes a total 
not far from $65.00 per month. In the Southern half of New Hampshire 
the cost of production per cow is $115.35 per year. In the Northern half 
it is only $106.00 per year. This is due to the fact that in the Northern 
part of New Hampshire they have excellent pasture and can raise more 
silage. 

Prof. Frank App, New Jersey Agricultural College, New Brunswick, 

N. J., presented data collected by him from 160 farms and 3,866 cows for 

the year ending May 14, 1914. The dairy farms were located in Sussex 

County, N. J. The result of this investigation is given in the following 

tabulation : 

Year ending May 14, 1914 

Number of farms 160 

Number of cows 3,866 

Pounds of milk per cow 6,491 

Pounds of butter fat per cow 207.7 

Per cent, of milk produced in six months beginning October 1 47.6% 



Costs. 



Amount Per Cow. Value Per Cow. 



Grain 
Hay . 
Other 
Silage 
Other 



dry forage. 



succulent feed. 



2,577 lbs. 

3,167 lbs. 

665 lbs. 

2,076 lbs. 

lbs. 



182.6 hours 
20.1 hours 



Pasture 120 to 150 days 

Bedding 

Human labor 

Horse labor 

Use of buildings 

Use of equipment x 

Interest on cows Value of cow $82 

Depreciation on cows, 8 per cent x 

Bull service x 

Miscellaneous x 



$38.66 

23.75 

2.59 

5.19 



8.00 



27.03 

3.55 

8.19 

.45 

4.10 

6.56 

2.40 

2.30 



Total cost 



$132.57 




iiji 






Returns other than milk— Amount Per Cow. Value Per Cow. 

Calves and calf hides x $6.53 

Manure recovered x 10.00 

Feed bags x 

Total returns other than milk x $16.53 

'.Net cost of milk 116.04 

Butter fat, cow testing assoc, average 3.2 per cent. 

; George C. White, Professor of Dairy Husbandry, Connecticut Agri- 
cultural College, Storrs, Conn., furnished data from a survey made of 
178 farms in the State of Connecticut. In this survey there was used a 
schedule of cost items originated in Massachusetts which had later on been 
accepted by the Federal authorities. This survey was made the first part of 
Jtme, 1917, and the cost figures cover the period from May 1, 1916, to April 
30, 1917. The greater part of these farms had records for the amount 
expended for dairy charges. The minimum number of dairy cows per herd 
was 7, the average ntunber of cows was about 18 J^. The results are 
given in a bulletin dated November 1, 1917. In this report the num- 
ber of cows was 3,258, producing at an average of 6,009 lbs. of milk per 
year. This is higher than the state average of 5,500 lbs. One and one-half 
per cent of the cows died during the year and others were sold for beef. This 
amounts to an average decrease of 5.98. Interest on investment per cow at 6 
per cent was $6.53. The cost for grain is taken at the actual cost paid by the 
farmers. He figures the cost at $40.22 per ton, the average consumption 1.05 
tons, green feed 4.10 tons at $20.87; silage, 7,380 lbs., at $5.00 per ton, 
$19.02; other green feed, 820 lbs., at $4.50 per ton, $1.85; dry forage, 
1.94 tons, $29.37; hay, $15.00 per ton plus other forage; pasture, $7.17; 
bedding, $1.63. 

In one tabulation is shown the cost per quart for the month of April, 
which was .0629 ; another tabulation shows the cost per quart in herds vary- 
ing in the production of milk as follows : 

Milk Production. Cost Per Quart 

4,500 lbs. or less 0672 

4,501-5,500 lbs 0594 

5,501-6,500 lbs 0562 

6,501-7,500 lbs 0542 

7,500 and over 0466 

These figures differ slightly from those recalculated by the Committee 
from Professor White's data and used elsewhere in this report. 

Special investigations were carried on by auditors from the office of 
the Commissioner of Accounts on a number of private farms. 

Farm No. 1, in Northern New Jersey, showed cost items from Novem- 
ber 1, 1916, to November 1, 1917, as follows: 



m 

Cost of Milk Production — Dairy Farm in Northern New Jersey — From 

Information Given Verbally by Owner. 
Herd of 19 Cows. 

Total for Year, 

Nov. 1. 1916, to Average 

Nov. 1, 1917. Per Cow. 

1. Feed for Cows — 

la. Grain $666.90 $35.10 

lb. Hay 466.67 24.562 

Ic. Silage 297.18 15.64 

Id. Pasturage 123.57 6.504 

2. Labor on Cows — 

2a. Milking 367.34 19.334 

2b. Cleaning Cow Barn 87.16 4.587 

2c. Hauling Milk (Man and Horse Labor). 325.50 17.132 

3. Supplies and Materials — 

3a. Bedding 70.00 3.684 

3b. Small Repairs 50.00 2.632 

4. Overhead Charges — 

4a. Interest on Plant and Equipment 127.98 6.736 

4b. Depreciation on Plant and Equipment.. 63.30 3.301 

4c. Interest on Value of Cattle 108. 30 5 . 70 

4d. Taxes on Plant, Equipment and Cattle. 48.60 2.558 

4e. Depreciation on Cows 95.00 5.000 

4f. Bull Service 58.50 3.08 

4g. Supervision 250.00 13.158 

Total Gross Cost $3,206.00 $168,706 

5. Offsetting Accounts — 

Manure, calf, etc 338.02 

Net Cost $2,867.98 



Net Cost of Milk Production, $2,867.98. 

Milk Sold. Used. Total Production. 

113,831 lbs. = 52,931 qts. 3,883 lbs. = 1,805 qts. 117,714 lbs. = 54,736 qts. 

$2,867.98 -7- 117,714 = $2,436 per cwt. = net cost of production. 
$2,867.98 -f- 54,736 = $0.0524 per qt. = net cost of production. 
$2,977.87 -f- 113,831 =^.616 per cwt. = Aver, sale price per year. 
$2,977.87-;- 52,931 = $0.0562 per qt. = Aver. sale price for year. 

Farm No. 2 showed cost items for producing milk for the period from November 
1, 1916, to November 1, 1917, as per the following schedule: 

Cost of Milk Production — Dairy Farm in Northern New Jersey — From 

Information Given Verbally by Owner. 

Herd of 47 Cows. 

Total for Year, 

Nov. 1. 1916, to Average 
Nov. 1, 1917. Per Cow. 

1. Feed for Cows — 

la. Grain $4,720.96 $100,446 

lb. Hay 1,133.17 24.11 

Ic. Silage 339.34 7.22 

Id. Pasturage 290.74 6.186 



• • 






40 



41 



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tut 




iniiiflfi 



Total for Year, 

Nov. 1. 1916, to Average 

Nov. 1, 1917. Per Cow. 

2. Labor on Cows — 

2a. Milking 555.10 11.81 

2b. Oeaning Cow Bam 100.57 2.14 

2c. Feeding Cows 100.57 2.14 

2d. Hauling Milk 375.50 7.99 

2e. Veterinarian Service 9.50 .202 

3. Supplies and Materials — 

3a. Ice 50.00 1.064 

3b. Bedding 52.56 1.118 

3c. Small Repairs 25.00 .532 

4. Overhead Charges — 

4a. Interest on Plant and Equipment...... 603.69 12.844 

4b. Depreciation on Plant and Equipment.. 186.87 3.916 

4c. Interest on Value of Cattle 282.00 6.000 

4d. Taxes on Plant, Equipment and Cattle. 148.46 3.159 

4e. Depreciation on Cows 235 .00 5.000 

4f. BuU Service 188.91 4.02 

4g. Supervision 200.00 4.255 

Total Gross Cost $9,597.94 $204,152 

5. Offsetting Accounts — 

Calves $100.00 

6. Manure 574.00 

674.00 

Net Cost $8,923.94 

Net Cost of Milk ProducHon, $8,923.94. 

Milk Sold. Used. Total Production. 

304,753 lbs. = 141,710 qts. 3,833 lbs. =• 1,805 qts. 308,636 lbs. = 143,515 qts. 

$8,923.94 -7-308,636 = $2,891 per cwt. = net cost of production. 
$8,923.94 -r- 143,515 = $0.0622 per qt. = net cost of production. 
$7,850.60 ^ 304,753 = $2,576 per cwt. = Average sale price for year. 
$7,850.60 -f- 141,710 = $0.0554 per qt. = Average sale price for year. 

Loss per qt. of milk sold $0.0066 under assumption made as to compensation of 
owner and family, etc. 

Professor R. A. Pearson, President of the College of Agriculture of 
the University of Iowa, presents published data secured from cost-account- 
ing restilts in the Chicago milk district, representing approximately 1,000 
cows, and states that the amount of feed, forage and labor entering into the 
cost of producing 100 lbs. of milk is : 

Grain 44 lbs. 

Silage 188 lbs. 

Hay 50 lbs. 

Bedding 39 lbs. 

Man hours 2.42 hrs. 

He estimates that the costs are: 

Grain $55 per ton 

Hay $10 per ton 

Silage $6 per ton 

Bedding $6 per ton 

Man hours 25c per hour 

These figures give the average yearly costs per one hundred-weight of 
$2.75. Prof. Pearson estimates that the cost in the month of October is 



109.2 per cent of the average cost, which would make the cost for the 
month of October, 1917, $3.00 per one hundred-weight. 

Professor Oscar Erf, of the University of Ohio, Coliunbus, Ohio, pub- 
lished recently a statement of the cost of keeping a cow for one year in a 
well managed herd. The items are as follows : 

Feed — 

Concentrates— 2,140 lbs. at $46 per ton $49.22 

» 

Dry Roughage — 

Hay— 3,800 lbs. at $12 per ton 22.80 

Stover— 370 lbs. at $6 per ton l.U 

Succulent Feed — 

Silage— 6,950 lbs. at $6.50 per ton 22.60 

Pasture — 

4 months at $3 per month 12.00 

Total $107.73 

Labor- 
Including feeding, milking, driving cows, cleaning stables, clean- 
ing and spraying cows, 127 hours at 18c 22.86 

Handling Milk — 

Carrying, cooling, etc., 27 hours at 18c 4.86 

Hauling Milk — 

28 hours at 18c 5.04 

Managerial Labor — 

Buying and selling cows, buying^ and hauling feeds, equipment, 
attending sick cows, marketing milk, dairy meetings, dairy 
papers, 36^ hours at 18c 6.57 j 

Horse Labor — 

30 hours at 15c 4.50 

Total Labor Cost $43.83 

Other Costs — [ 

Depreciation on cows $8.00 

Interest on cows 6.00 

Taxes 1 . 40 

Injury risk 1 .60 

Veterinary services 3 .48 

Tuberculin tests 2.00 

Mortality 1.90 

Calf loss 2.10 

Total $26.48 

Buildings and Equipment — 

Interest on barn 3.00 

Interest on fences 1.60 

Interest on milk house .72 

Interest on machinery 1 .20 



I .1 



I 



m 



J, 



•Itlilll 




42 

Buildings and Equipment {Contd.) — 

Interest on ice house .67 

Interest on yard for cows 2.A0 

. Taxes and insurance 1 .44 

Depreciation on barn 1 [io 

Depreciation on fence 1 .80 

Depreciation on milk house .60 

Depreciation on ice house .18 

Depreciation on machinery 3.2O 

Total $18.01 

Total $196.05 

These figures are based on last year's prices for feed and labor. The 
average cow under these conditions would produce 5,500 lbs. From this 
cost must be subtracted the credits amoimting to $27.00, making the net 
cost $169.05 per cow, which figures $3.07 per 100 lbs. of milk. 

Concerning these figures. Professor Erf, however, says that these indi- 
cate the cost under sanitary conditions. 

He submits in addition, another set of figures to show how cheaply 
milk can be produced in an ordinary dairy and finds that at the same prices 
for feed and labor, the cost would be only $91.70 per year to produce 
4,000 lbs. of milk or $2.29 per one hundred-weight. 

Bulletin No. 501 of the U. S. Department of Agriculture contains a 
study on the cost of producing milk on four dairy farms located in Wis- 
consin, Michigan, Pennsylvania and North Carolina. This shows the 
proportion of cost items on these four farms as follows: 



Location 



Feed 



Labor Other Costs 



Wisconsin 

Michigan 

Pennsylvania .. 
North Carolina 

3X±= 



48.5% 
57.2% 
52.1% 
53.2% 



31.7% 
25.6% 
24.0% 
22.8% 



19.8% 
17.2% 
23.9% 
24.0% 




Farm 

Wisconsin 

Michigan 

Pennsylvania 

North Carolina .. 



Cost 
per Cow 



Milk 
per Cow 



Cost per Cost per 
100 lbs. Quart 



$79.86 

105.12 

90.85 

110.95 



5,240 lb. 
6,536 lb. 
5,058 lb. 
5,142 lb. 



$1.52 
1.61 
1.80 
2.16 



$0.0328 
.0346 
.0387 
.0464 



Prices of feed and labor are based on prices of 1912; grain at $25 per 
ton and labor at not more than 14c. per hour. 



43- 

Cost of Producing Milk on the Sheffield Experimental Farm at 

hobart, n. y. 

For the year ending October 31, 1917. 

A most careful and detailed study of the cost items connected with the 
operation of this dairy farm was made by auditors from the office of the 
Commissioner of Accounts, New York City. The farm is located just 
west of the Catskill Mountains in the town of Harpersfield. It consists 
of 512 acres located on a hillside with a level stretch along the river bottom. 
The acreage is divided as follows : 

Tillable land 214^ acres 41.9% 

Natural pasture 268J4 acres 52.4% 

Woodland 25 acres 4.9% 

Meadows, not tillable 4 acres 0.8% 

512 acres 
Buildings are valued as follows : 



Present Value 



Cost to 
Rebuild 



Main Cow Barn and Extension $12,000.00 

Upper Cow Barn 3,000.00 

Third Cow Barn 1,500.00 

Carriage House and Stable 2,500.00 

Main Dwelling 1,500.00 

"Graham" House 2,000.00 

« Teyo " House 1,000.00 

"Jones" House 1,000.00 

Piggeries 500. 00 

Tool House 500.00 



$12,000.00 
3.500.00 
2,000.00 
3,000.00 
2,000.00 
2,000.00 
1,000.00 
2,000.00 
500.00 
500.00 



The farm activities are divided between five different enterprises. The 
farming activity is carried on almost entirely for the production of stock 
feed. Under contracting is included the operation of the stone crusher, 
the hauling of stone, ice, milk and cream. The dairy was operated for a 
number of years at a loss, but at the present time, under a competent super- 
intendent, is a distinct financial success. 

The auditors were able to separate the cost of labor and other cost 
items of all five of the different enterprises conducted on this farm, so that 
the cost of producing milk could be separately stated. These costs appear 
in the following tabulation: 

Hohart Farms — Statement of Milk-Producing Costs and Income, Year 

Ended October 31, 1917. 

Costs — 

Forage $10,962.08 

Labor 6,790.46 

Supplies, Materials and Repairs 1,339.97 



il r. 



ill 



Costs (Con/d.)— 

Y^^^rest 2,192.01 

Insurance 9357 

1 axes j^ 22 

Depreciation !!!!!!.!!!!!!!!.!!!!..! 831 80 

Bull Service !!.......!.....!......!!.*.* 72.70 

Total $22,481.81 

Credits — 

Manure t2 124 38 

Miscellaneous '...'....'......... . .' 731 .38 

Net Cost (367.425.7 Milk-Quirts) ^fill'ls 

Cost per Milk-Quart, .0534. 
Income from Milk and Cream $21,650. 17 

Profit on 367,425.7 Milk-Quarts (123.6 Cows) $2,024.12 

Profit per Milk-Quart, .0055. === 

Profit per Cow, $16.3764. 

From the above it appears that on milk alone produced on this farm 
there was a profit of $2,024.12. 

The statistics of the dairy and of the cost items connected with the pro- 
duction at Hobart appear in the following tabulation : 

Cost of Milk Production, Sheffield Experimental Farm, Hobart, N. Y. 

No. of cows covered 123.6 

Period covered 1 yr. 

Average quarts of milk per cow per year 2972.7 

Average lbs. of milk per cow per year 6317! 

Amount of Grain 189.6 tons 

Pounds per cow per year .....'.'. 3068. 

Pounds per 100 lbs. of milk 4S,6 

Pounds per quart l 03 

Cost of Grain $8,079138 

Pnce per ton (2,000 lbs.) $42.52 

Per cow per year 55 37 

Per 100 lbs. of milk I.03 

Per quart of milk .022 

Amount of Ensilage 192.0 tons 

Pounds per cow per year 3106.7 

Pounds per 100 lbs. of milk 49.2 

Pounds per quart of milk 1.05 

Cost of Ensilage $543.00 

Price per ton (2,000 lbs.) $2.83 

Per cow per year $4 39 

Per 100 lbs. of milk ^069 

Per quart of milk .0015 

Amount of Hay 130.4 tons 

Pounds per cow per year 2110. 

Pounds per 100 lbs. of milk 33.40 

Pounds per quart of milk 79 

Cost of Hay $1,956.60 

Pnce per ton (2,000 lbs.) 15.00 

Per cow per year IS g3 

Per 100 lbs. of milk .256 

Per quart of milk .0053 



45 

Amount of Other Fodder 15.0 tons 

Pounds per cow per year 242. 

Pounds per 100 lbs. of milk 3.83 

Per quart of milk. .0814 

Cost of Other Fodder $225.00 

Price per ton (2,000 lbs.) $15.00 

Per cow per year 1.82 

Per 100 lbs. of milk .029 

Per quart of milk .00061 

Cost of Pasture $158.10 

Per cow per year 1.28 

Per 100 lbs. of milk .02 

Per quart of milk .00043 

Total Cost of Feeding $10,962.08 

Per cow per year ^-^ 

Per 100 lbs. of milk ^"^^o 

Per quart of milk .0298 

Cost of Labor $6,790.46 

Per cow per year ^•?i 

Per 100 lbs. of milk -^ 

Per quart of milk .018 

Miscellaneous Costs $1,412 67 

Per cow per year 11 .43 

Per 100 lbs. of milk -18 

Per quart of milk .0038 

Overhead Costs $3,316.60 

Per cow per year 26.83 

Per 100 lbs. of milk .42 

Per quart of milk ^__ .0089 

Gross Cost $22,AS\M 

Per cow per year ^°l-§2 

Per 100 lbs. of milk 2.87 

Per quart of milk 061 

Credits $2,855.76 

Per cow per year 23. 10 

Per 100 lbs. of milk .36 

Per quart of milk .0076 

Net Costs $19,626.05 

Per cow per year 158.79 

Per 100 lbs. of milk 2.51 

Per quart of milk 0534 

From this it appears that the cost of producing 100 pounds of milk 
for the year ending October 31, 1917, was ^.51, making the cost per quart 
.0534. 



46 



'It 



1 



I I 



illl 



A condensed statement of the cost of milk production on the Hobart 
Farm appears in the following list : 

Statement of Income and Profit and Loss — Hobart Experimental Farm — 

Year Ended October 31, 1917. 



Enterprises. 
jc 



Total. 

Income — 

(1) Milk and Cream $21,650.17 

(2) Calves 161.00 

(3) Pigs 2,126.79 

(4) Produce 3,924.70 

(5) Crushed Stone .. 282.70 

(6) Hauling on Con- 

tract 526.50 

(7) Manure 2724.22 

(8) Miscellaneous .. 2,169.13 

Total Income.. $33,565.21 

Costs — 

(9) Forage $16,062.78 

(10) Labor 8,553.95 

(11) Plant Supplies, 

Materials and 

Repairs 2,492.64 

(12) Pigs 376.00 

.(13) Interest 2,974.87 

(14) Insurance 120.55 

(15) Taxes 259.49 

(16) Depreciation ... 1,194.05 

(17) Miscellaneous .. 663.47 

(18) Bull Service ... 72.70 

(19) Manure 1,833.34 

Total $34,603.84 

Deduct — Increases in In- 
ventory — 

(20) Forage $3,086.52 

(21) Young Cattle ... 546.00 

(22) Young Swine .. 652.00 

(23) Miscellaneous .. 15.00 

$4,299.52 

$30,304.32 

Add — Decreases in In- 
vent ory — 

(24) Forage $1,441.50 

(25) Miscellaneous .. 130.36 

Total $1,571.86 

Total Costs ... $31,876.18 



Con- 
Milk Calf Pig tract- 
Producing. Raising. Raising. Farming, ing. 



$21,650.17 



$161.00 



$2,126.79 



$3,924.70 



2,124.38 
731.38 



599.84 
14.93 



$282.70 
526.50 

19.86 V,39i.'ii 'ii;9i 



$24,505.93 ^S.77 $2,146.59 $5,315.81 $821.11 



$12,701.34 $1,274.65 $234.54 $1,852.25 

6,790.46 74.48 131.10 1,254.57 $303.34 



1,187.74 19.78 



2,192.01 

98.57 

194.22 

831.80 

50.15 

72.70 



18.17 
2.02 
1.87 

17.08 
8.72 



97.31 

376.00 

87.78 

2.75 

5.40 

15.17 

242.05 



1.140.72 47.09 



578.75 
11.56 
45.40 

269.80 
40.15 



98.16 

5.65 

12.60 

60.20 

322.40 







1,833.34 


$24,118.99 
$2,768.26 


$1,416.77 

$318.26 
546.00 


$1,192.10 $7,026.54 $849.44 




652 00 




10 00 5 00 






$2,768.26 


$864.26 
$552.51 

28.28 


$662.00 $5.00 


$21,350.73 

$1,029.00 
102.08 


$530.10 $7,021.54 $849.44 
$412.50 


$1,131.08 


$28.28 


$412.50 



$22,481.81 $580.79 $530.10 $7,434.04 $849.44 



Enterprises. 

Con- 
Milk Calf Pig tract- 

Total. Producing. Raising. Raising. Farming, ing. 

Net Income from Opera- 
tion — 

Profits $1,689.03 $2,024.12 $194.98 $1,616.49 

(Loss) (Loss) 
Losses $2,118.23 $28.33 

Net $1,689.03 $2,024.12 $194.98 $1,616.49 $2,118.23 $28.33 

Additions to Income — 
(26) Profit on Mature 
Stock Bought 
and Sold .... $3,332.00 $3,018.60 $313.40 

Total Profit for the Pe- (Loss) (Loss) 

riod $5,021.03 $5,042.72 $194.98 $1,929.89 $2,118.23 $28.33 

This statement is based on best data available at the Farm. 

Overhead items are approximately apportioned on the best apparent basis. 






48 



49 




'i- 



\mm 



The cost of producing one hundred pounds of milk, according to the 

To Produce One Hundred 



Sources of Information. 



Date. 



Grain. 

/ ' . 

Unit 

Amount. G)st, 

Ton. 



Warren, Broome Co 28.6 lbs. 

Warren, 21 farms in N. Y 29. 1 

Warren, General Formula 53. 1 

Bush Dairymen's League Sept. 15, 1917 34.7 

Brigham, Vt. Nov. 1,1917 23.3 

Fuller, N. H June, 1917 25.9 

White, Conn 35.0 

App, N. J May, 1917 39.7 

Rasmussen, Penn. 27.4 

Boston Chamber of Com., Me Sept, 1917 33.2 

Pearson, III Nov., 1917 44.0 

Cooper, Dairymen's League 



$55.00 
55.00 
55.64 

"siioo 

"56.66 
55.00 
54.60 



authorities quoted above, is shown in the following table 
Pounds of Milk. 



Silage and Green Feed. Hay. 

/ *" \ t * — 



Amount. 



Unit 
Cost, 
Ton. 



Amount 



Unit 
Cost, 
Ton. 



Labor. 



Amount. 



Unit 

Cost, 

Hour. 



Per- 
centage 
of Net 

Cost. 



Total 
Other 
Costs. 



110.81bs 73.8 lbs 

109.4 49.4 

97.2 61.0 

105.9 $5.00 51.8 

102.1 6.00 65.6 

55.6 5.00 67.4 

136.5 64.6 

31.9 56.8 

115.4 30.2 

60.8 6.00 86.5 

188.0 6.00 50.0 

8 on 



3.42hrs 

2.37 

2.83 

$12.00 2.59 

13.00 2.96 

13.19 3.45 

2.71 

2.81 

3 37 

*i6!66 3!89 

10.00 2.42 
12.00 



84.8% 17.9% 

81.3 23.0 

83.8 19.3 

$0.30 82.2 21.6 

.25 72.5 37.9 

.23 84.7 18.1 

85.7 16.7 

.222 83.4 19.9 

.25 78.2 27.9 

.25 95.8 4.4 

30 



4 




(•• 








50 

The report of the Milk Committee appointed by the Food Controller 
of Canada, dated November 24, 1917, shows that since the beginning of the 
War there have been the following advances in prices : 

Items Increase in Price 

Cows 50 per cent 

Feeds 75 per cent 

Labor 75 per cent 

Butter 40 per cent 

Cheese 50 per cent 

Milk 30 per cent 

" The cost of labor on a dairy farm five years ago was $25 to $30 per 
month. At the present time there is a floating population of inefficient 
laborers who ask from $50 to $60 a month. 

" Men who are expert dairymen have left the farm for munition work. 

" The overseas demand for the condensed product has resulted in high 
prices. 

" Some plants have been offering as high at $3.50 per 100 lbs. of milk. 

" Condensed milk exported from the United States during the fiscal 
years ending June 30, 1912, 1913 and 1914 totaled 17,792,579 lbs., or only 
2.27 per cent of the Allies* requirements. During the single year ending 
June 30, 1917, the export of condensed milk from the United States aggre- 
gated 269,103,213 lbs., or 57.2 per cent of the amount required by the 
Allies." 

Advances in the price of grain in the New York markets or points 
having the same rate of freight as New York, are : 



Food. 



Value December 15 



1915 



1916 



1917 



Yellow Com (per bu.) $0.83j4 $1 .08 $2.30 

Bran (per ton) 24.00 30.50 46.50 

Hay (per ton) 25.00 21.00 30.00 

Oats (32 lb. to bu.) .46^ .58j4 .89^ 

Oil Meal (per ton) 40.50 48.00 57.00 

Yellow Meal (per ton) 30.00 44.00 80.00 

Gluten Meal (per ton) 30.00 40.00 57.34 

The prices asked for milk by the Dairymen's League are based upon 
the grade of milk known as " Grade B " milk containing 3 per cent butter 
fat. Up to September, 1917, in addition to the price quoted, there was a 
butter fat premiimi of 3c. for each tenth per cent of butter fat above 3 
per cent. On October 1, 1917, the butter fat premitmi was raised to 4c. 
for each tenth per cent above 3 per cent. The average amount of butter 
fat in all milk shipped to New York City is about 3.5 per cent. At some 
seasons of the year it is higher, at other seasons lower than this. Using for 
the whole year the figure 3.5 per cent, as representing average butter fat. 



51 

the prices charged by the Dairymen's League for milk since October, 1915, 
appear in the following table : 



Dates 



October . , 
November 
December 
January . , 
February 
March . . . 

April 

May 

June 

July 

August . . 
September 



Price Per 


Price Per 


Price Per 


100 Lbs. 


100 Lbs. 


100 Lbs. 


1915-'16 


1916-'17 


1917 


$1.76 


$2.30 


$3.30 


2.00 


2.40 


3.54 


2.00 


2.40 


3.30 


1.94 


2.35 


• • « • 


1.88 


2.30 








1.76 


2.25 








1.53 


2.20 








1.41 


2.15 








1.29 


2.05 








1.47 


2.25 








1.65 


2.70 








1.72 


2.70 









Prices prior to October, 1916, are actual prices taken from " The Milk Reporter." 
Prices beginning October, 1916, are Dairymen's League prices with premium added for 
butter fat content of 3.5 per cent. This premium was 3c. for each 1/10 per cent butter 
fat over 3.0 per cent from October, 1916, to September, 1917, inclusive, and 4c for 
each 1/10 per cent beginning October, 1917. 

The rise in the price of milk for a period of two years is shown by the 
following table: 

Rise in Prices Paid Producers. 

Price Per Price Per 
Date 100 Lbs. Quart 

October, 1915 $1.76 $0.03782 

October, 1916 2.30 .04946 

October, 1917 3.30 .07096 

Total Increase $1.54. $0.03314 



Considering the data secured by this Committee from all sources of 
information on the subject of the cost of milk, the prices asked by the pro- 
ducers seem fair and reasonable. 



9. Cost of Distribution. 

In the report of the Wicks Committee, there was included a statement 
of the cost of distribution of milk, compiled from the results of the audit of 
the accounts of a number of large distributing milk companies. 






# 



52 




These may be summarized as follows 



Cost Items. 

Factory Expense 

Country Charges 

Mfg. Expense 

Country, City and Store Expense. 

Freight 

Branch Selling and Distributing. . 

Bottles, Caps and Cans 

Bottles 

Delivery Charges 

Advertising 

General Selling Expense 

Store Expense 

General Administration 

Administration Expense 

Administration 

Branches 

Total Cost Distribution 

Cost of milk 

Net Profit 

Average Selling Price 



Borden's 

Farm 

Products Co. 



Sheffield 
Farm Co. 



Alex. 
Campbell 
Milk Co. 



Clover 
Farms Co. 



.012342 



.007252 
.018890 



.001168 
^666927 



.040579 
.036847 
.002915 

.060341 



.01109 
! 00694 



.00286 
^61360 



.00221 
! 00339 



.04009 

.03757 
.00243 

.08009 



.003444 
.004848 

,006262 



.002040 
.017328 



.002881 
.001652 

.038455 
.035365 
.002979 

.076799 



.0266 
.0069 



.0015 



.0034 



.0384 
.0355 
.0024 



.0763 



* 




It is interesting to note the conclusions of the Wicks Committee after 
a survey of these cost items. They are as follows : 

Cost of Milk 03797 

Country Charges 00297 

Teaming and hauling 00294 

Pasteurization 00370 

Bottles and Caps 00241 

Delivery expenses 02384 

Freight 00934 

Adm., clerical and adv 00319 

Total cost 08636 

Profit 00364 

Total 09000 .09 



The above is a statement of the cost of delivery of a bottle of 9-cent 
Grade " B " milk. It " does not provide for any reduced profit or loss on 
milk purchased by the distributor for which he may have no retail market 
at 9 cents but disposes of at wholesale prices or in other forms such as sour 
milk, sotir cream, pot cheese, butter, etc." Also the above items " do not 
provide for earnings on capital invested." 

The average net profits of the companies on each quart of milk bought, 
regardless of whether it was disposed of as market milk, butter, cheese, or 
otherwise, was found to be .0027. * ♦ ♦ 



53 

" In other words, the average profit of .0036 on the 9-cent bottle was 
reduced to the average of .0027 on the entire purchases by lower profits or 
losses on wholesale milk, butter, cheese, or products. 

"If these four companies had paid to the dairymen of the State during 
the year 1915-1916 their entire profits, capital earnings and dividends it 
would have brought to the dairymen less than 12j4 cents per 100 pounds 
more than they did receive. But the dairymen have established during the 
months from October, 1916, to April, 1917, an increased price of 45 cents 
to 50 cents per 100 pounds or an increase nearly four times greater than 
the average profits, dividends and earnings made by these companies during 
the prior year. 

" This business is conducted on an extremely competitive basis ; * * ♦ 
a large part of the cost arises from the bitter competition existing in the 
distribution of the product. * * * An army of solicitors and sales 
agents are maintained. * * * Great and expensive organizations are 
maintained. * * * Overhead charges attributable to this work amount 
to an alarming sum. * ♦ * It is customary to refer to the fact that 
four or six or ten milk wagons and milk drivers visit the same block, * * * 
but this ignores the really greater expense of the silent army of retainers. 
♦ * * Not only do we find in single blocks these wagons and horses, 
but on the same block six solicitors ; six route superintendents ; six staffs of 
clerks and bookkeepers. * * * The distribution of milk is a public 
service, which, to be put upon an economic basis, requires public regulation 
to the end that all unnecessary services even of a competitive kind may be 
eliminated. 

" Distribution of Milk Should Be a Regulated Public Service." 
" It is safe to assert that the consumer in the City of New York pays 
several millions of dollars annually for the privilege of having all the numer- 
ous purveyors of this necessity of life engage in attempts to serve him. * * * 
A milk supply is as much a daily necessity and even more so than gas and 

electricity. 

" It certainly seems as if the dairymen of this State and the distributors 
with their invested capital, and the consumer, should co-operate to the end 
that these unnecessary competitive wastes be eliminated and the dairymen's 
milk brought to the consumer at the lowest possible expense. ♦ * ♦ 

" The investigations of the Committee lead to the conclusion that under 
the present competitive system it takes almost as many men to bring the 
dairyman's milk to the consumer as there are dairymen engaged in the 
production of milk with all their employees. This is the result of the purely 
competitive basis upon which the business is handled. Three or four milk 
stations are being maintained with a separate force of employees to collect 
or receive the dairymen's milk at many points where one well-equipped 
station with a competent force could do all the collecting at one-fifth the 
present expense. This unnecessary duplication of service follows with all 





H 

its attendant overhead and capital investment from the country milk station 
until the bottle of milk is finally deposited at the consumer's door. A large 
part of this, in the judgment of this Committee, could and should be elim- 
inated. * ♦ * xhe only solution possible is to limit and leave only those 
in the field which the service actually requires. This is just as obvious in 
the case of milk as it is in gas or any other daily necessity supplied in small 
quantity to the consumer. 

" There is no milk trust controlling the purchase and sale of market milk 
in the city of Buffalo. There is none in Rochester; there is none in Syra- 
cuse ; there is none in Utica ; there is none in Albany ; nor in any city between 
Albany and New York, nor in any town or village of the State. There is 
no milk trust controlling the purchase and sale of milk in the City of New 
York. Instead there is sharp and bitter competition, so far as the records 
of this Committee disclose, in each and every one of the places. There 
are four stations in many places where one could collect the milk. There 
are four outfits of station managers and employees in many places where 
one could do the work. Every intelligent person who has ever discussed 
the question concedes that there are four horses and wagons, four or five 
or six groups of solicitors; four or five or six separate organizations and 
overhead charges duplicating work that one of each could well perform. 

" There is too much capital already invested in the business. ♦ * * 
Here, then, is the waste and the loss. ♦ ♦ ♦ Instead of introducing 
more exp)ensive competitors in the field to waste more money of the con- 
sumer, the State should endeavor by judicious legislation, to permit the 
elimination of all unnecessary investments both of labor and capital and 
effectively control the business operations of the remainder." 

Testimony submitted by Mr. Loton Horton of the Sheffield Farms 
Company calls attention to the fact that the percentage of profit on the 
total business of the company for the past 4 years has been : 

Date Selling Profit 

1914 6.64 

1915 6.36 

1916 4.61 

1917 (first 6 months) .238 

The costs of doing business for the month of September, 1917, were 
given by Mr. Horton as follows: 

Cost Items Cost per Quart 

Milk 0608 

Conntry Station .0056 

Freight 0084 

Gty Plant 0081 

Bottles, Caps, etc 0045 

Total 0874 

To this must be added overhead charges and the cost of retailing. 



f 



55 

Mr. Weiant, President of the Borden's Farm Products Company, testi- 
fied as follows: 

" There was invested in the business of this Company as of 
August 31, 1917, $16,491,117.10. In this figure no good wUl is 
included nor any other intangible assets. We purchase now the pro- 
duct of about 8,000 farms, and prior to October 1, the product of 
about 10,000 farms. 

** The Company owns approximately 225 country receiving 

stations. 
" Operates 6 city pasteurizing plants. 
'* 74 city branches and stores. 
" Employs over 5,000 persons. 
" Payroll between four and five million dollars. 
"Vehicle investments, $800,000. 
" 3,000 horses, costing $800,000. 
** Harness, $100,000. 
** Food for horses, $500,000. 
** Bedding, $50,000. 
" Ice bill, $275,000. 
" Freight, $1,750,000. 
" Veterinary forces, 7. 
" Inspectors, 60. 

Full time inspectors, 60. 

Half time inspectors, 30. 

Cost of inspection, $100,000. * 

Repair Shop, $200,000. 

Employees in repair shop, 200. 

Wagon routes, 1,900. 

Loss on bottles, boxes and cans, $450,000. 

One week's credit to customers, interest account on 
$1,000,000— $75,000. 

" Milk was soM to the consumer at too low a price during the 
years of 1909 to October, 1916, when it retailed at 9 cents. This 
was also true of 1916 and 1917 at 10 cents. There was an inade- 
quate profit to the producer during the greater part of that period 
and this continued up to a year or so ago. 

" It is an unsound business practice among distributors, of charg- 
ing one price all the year around. 

" All during the months of October, November, December, Jan- 
uary, and occasionally September and February, our Company 
actually lost money every year and made its loss up and earned Its 
profits in the remaining months of the year. 



if 



tt 



it 



tt 



it 



t* 



tt 



it 



Ml 





« 



56 

There is a reduction in consumption following increase in retail 
price. 

" The increase since September, 1916, is 5 cents per quart for 
Grade B milk delivered in bottles. 4 cents is going to the producer 
and 1 cent to the distributor. 58 per cent, of our fluid sales repre- 
sent retail bottle business at 14 cents per quart for Grade B and 15 
cents for Grade A. 42 per cent, of the business is wholesale through 
more than 5,000 stores at an average price of a fraction over 10 cents 
per quart, and the consumer is able to purchase loose milk at 11 cents 
per quart. 

" Month of August, 1917, number of quarts of milk purchased 
and sold, 25.379,138. 

" Value of sales, $2,942,759.46. 

" Received for each quart, average of .11595. Against this must 
be charged oflF the following items of cost : 



G>st Items Total 

Milk $1,491,427.54 

Freight 212,446 . 94 

Factory Expenses 580,255.81 

Delivery Expenses 554,411.89 

General Administrative Expenses 35,760.55 

Total Cost 2,874,302 . 73 

Net Profit 68,456.73 



Per Quart 



.05877 
.00837 
.02286 
.02184 
.00141 
.11325 
.00270 



" For the 12 months ending June 30, 1917, there was no net 
profit, but a loss of $115,686.86. This represents a loss in percentage 
of sales of .53 per cent., and of .71 per cent, on the investment. 

" For the month of August, 1917, profits were $68,456.73. The 
average net profit, .0027 per quart. The profit on sales of 2.33 per 
cent, and on the investment of .00412 per cent. 

" The entire elimination of distributors* profits for the past year 
would have resulted in the saving of nothing per quart to the con- 



sumer 



>» 



Mr. John J. Dillon testified that, in his opinion, milk could be taken 
from the farmers' hands in the country at any time, pasteurized and treated 
in the country, brought to the city and delivered to grocery stores at a cost 
of 1^ cents over the price paid to the producer, and that this would mean 
that Grade B milk could be dipped out of cans and sold from stores at 9 
cents per quart. He also testified that it was his opinion that milk could 
be put in bottles and pasteurized and delivered to stores at cost of 2% cents 
above the price paid to the producer. This means that it could be delivered 
to stores in bottles at 10 cents and sold by them at retail for 11 cents per 
quart. 



57 

The witness failed to furnish any data based on actual business or on 
experimental tests to substantiate his estimates of cost. 

Mr. Van Son, Sales Agent of the Co-operative Milk Producers' Mar- 
keting Association, stated that operations for 6 months showed a profit of 
$800, but that there were losses for October and November, due to surplus 
milk and to the purchase of milk cans, amounting to $15,000. 

Mr. Thompson, the Treasurer of the Co-operative Milk Producers* 
Marketing Association, stated that he thought it possible for farmers to 
operate country plants cheaper than the dealer could. 

For the month of July, 1916, the Borden's Farm Products Company 
made a profit on Grade B milk of $75,224.96 as compared with the month 
of July, 1917, when the company made a profit of $34,360.90 on the same 
grade of milk 

For the month of October, 1917, the data shows a net loss by this com- 
pany of $54,483.74 on the sale of Grade B milk. 

For comparison with the results obtained by the Wicks Committee, the 
Mayor's Committee on Milk secured similar data from five of the large dis- 
tributing companies for ten months ending November 1, 1917. 

The following were the results of this survey: 



Empire 
Cost Items. State 

Dairy Co. 

Average Selling Price, Quart .08680 
Amount paid to Producers. . . .05627 

Country Station Expenses 00269 

Freight 00563 

City Station Expenses 01107 

Delivery 00857 

Cartage, Ferriage 

Factory Expense 

Administration, Clerical and 

Overhead 00203 

Depreciation 00193 

Total Cost of Distribution. . . .03192 

Total Cost 08819 

Profit or Loss L .00139 



Mutual 

McDer- 

mott Co. 



Clover 
Farms Co. 



Alex. 
Campbell 
Milk Co. 



Borden's 
F. P. Co. 



.08322 
.05196 



.01438 
:6i683 



.00319 
.00109 



.03549 

.08747 

L. 00425 



.06855 
.05645 
.00911 
.00704 



.01358 



.00430 



.03483 

.09128 

L. 00273 



11628 
05782 
00408 
00966 
00921 
02820 



.093144 
.045685 
.014711 
.007984 
.023738 



00470 



.03605 

.09387 

P. 00241 



.00181 



.047614 

.093299 

L. 000155 



In the above tabulation the items are not accurately comparative for the 
reason that in the case of the Borden Company the figures consist of aver- 
ages for the year ending June 30, 1917, while in the cases of the other five 
companies the figures are averages for the first ten months of the year 1917. 
In another respect the figures are not comparative, namely: because the 
items of cost are not uniform. The bookkeeping methods of the six com- 
panies do not correspond and the groupings of their costs do not fall under 
the same heads, excepting in a few instances. For example, freight means 



I 



V* 



59 



III 



the same thing but under other items country station and city station may 
be combined under factory expense, and delivery may include cartage, ferri* 
age and depreciation. Also administration may include some items in the 
cost of delivery. The figures presented, however, represent the best analysis 
that could be made from the account books of the companies, and while the 
differences noted above make exact comparison impossible, yet the total cost 
of delivery in each instance is correctly represented. 

Comparison of the data contained in the above tabulations can be made 
up arranging the total items in columns as follows : 



Company, 


Price Paid 
Producer 


Cost of 
Distribution 


Averajfe 
Selling Price 


Profit or Loss 
Per Quart 


1916 








- 


Borden 

Alex. Campbell . . 

Qover Farms 

Sheffield Farms... 


.036847 
.035365 
.03550 
.03757 


.040579 
.038455 
.03869 
.04009 


.080341 
.076799 
.07629 
.08009 


.002915 profit 
.002979 profit 
.00211 profit 
.00243 profit 


1917 










Borden 

Alex. Campbell . . . 

Clover Farms 

Empire State 

Mutual McDermott 


.045685 

.05782 
.05645 
.05627 
.05198 


.047614 

.03605 

.03483 

.03192 

.03549 


.093144 

.11628 

.08855 

.08680 

.08322 


.00015 loss 
.00241 profit 
.00273 loss 
.00139 loss 
.00425 loss 



A survey of the above figures shows that there was an increase of about 
2c. per quart paid to producers while the increased selling price with the 
exception of one company averaged about Ic. per quart. 

The cost of distribution varied, in one company being greater, in two 
others slightly less. The net result of the transaction of paying the pro- 
ducer the additional 2c. was that four out of five distributing companies on 
the list of 1917 sustained losses on each quart of milk sold as shown in 
the figures in the last coltunn. 

The actual losses of three of the companies for the ten months of 1917 
ending November 1st, were: 

Company No. 1— $169,574.54 
Company No. 2 — 42,256.98 
Company No. 3 — 52,873.19 

One of these companies was forced into the hands of a receiver as a 
result of these losses. 

A more accurate comparison of the cost items in distribution of 1916 
compared with the cost items of 1917 is shown in the figures obtained from 
the extensive and detailed audit made of the books of the Borden's Farm 
Products Company by Mr. Herbert B. Hawkins, certified public accountant. 
in the employ of the Committee. 



It is impossible to include more than a few of the figures contained in 
this extensive and detailed audit. The accountant's report covers 125 pages 
and is a very extensive and detailed piece of work, involving not only the 
checking up of all book entries with the original vouchers but the classifica- 
tion and grouping of cost items in numerous ways. Among these is a 
statement of the decrease in profit due to variations in sales and cost for 
the years ending June 30, 1916, and June 30, 1917. These are reduced to a 
unit basis and are shown in table (pp. 60-61). 

It must be borne in mind that the figures in table (pp. 60-61) are only 
up to June 30, 1917, and do not, therefore, include the increase in costs which 
have occurred since that date. They indicate, however, six items showed 
increases of expense which added to the cost of distribution more than one 
and one-half cents per quart, so that the year's business in 1917 was done at 
a loss of .000155 pet quart or $29,832.72 as compared with a profit of 
.002611 per quart or $571,460.27 on the business transacted in the year 
1916. 

A more accurate method of determining the exact increase of cost 
items consists in comparing the actual costs for the year 1917 with the 
percentage costs of 1917 applied to 1916 sales. This is shown in the 
following tabulation : 



Cost Iteir?. 1916. 

Cost of Milk 042719 

Factory Expense 014661 

Freight 008408 

Branch Selling and Distributing 021900 

General Selling Expense 001354 

General Administration — 001074 

Total ! 090117 

Net Profit 003027 

Net Loss 



1917. 



Increase. Decrease. 



045685 


.002966 




014711 


.000050 




007984 




.666424 


022242 


.000342 




0014% 


.000142 




001181 


.000107 


• • • • • ■ • 


093229 


.003607 


.000424 


oooiss 







60 



Borden's Condensed Milk Company-^Farm Products Division, and Borden's Farm 
and Losses for Fiscal Year June 30. 1916. and Fiscal Year June 30, 1917, for 
Cream or Other By-Products. 




1916 
Amount. 

Pounds of Milk Purchased 470,463,698 

Equivalent in Quarts of Milk Sold 218,820,305 

Sales $17,580,229.78 

Cost of Milk , $8,062,763.23 

Factory Expenses 2,767,008.82 

Freight 1,586^56.65 

Branch Selling and Distributing Expenses.. 4,133.400.35 

General Selling Expenses 255,634.22 

General Administration Expenses 203,106. 13 

Total Cost and Expenses $17,008,769.51 

Net Profit $571,460.27 

Net Loss 



Quart Cost 

and 
Selling Price. 



1917 
Amount. 



413,952,502 
192,536,047 



080341 $17,933715.21 



036847 
012646 
007252 
018890 
001168 
000927 



$8,796,129.29 

2332,356.31 

1,537,208.69 

4,282,435.37 

288.067.75 

277,350.52 



077730 $17,963,547.93 



002611 



$29^32.72 



m 



Products Co., Inc., Successors After May 1, 1917. -Comparative Statement of Profits 
Eastern Routes on Total Milk Purchased. Reduced to Quarts, and Sold As Milk, 



Quart Cost 

and 
Selling Price. 



Increase 



Decrease. 

A 



Percentage of Increase 
or Decrease 



Amount. Per Quart. Amount. Per Quart. Amount. Per Quart 



.045685 $733,365.96 

.014711 65,347.49 

.007984 

.022242 149,035.01 

.001496 32,433.53 

.001181 24,244.39 



,093299 $954,778.42 



.000155 



56,511.196 
26,284,258 



.093144 $353,485.43 .012803 



.006838 

.002065 

.000732 $49,647.96 

.003352 

.000328 

.000254 



.015569 



$601,292.99 



2.01% 15.93% 



9.09% 
2.36% 
3.12% 
3.60% 
12.68% 
11.93% 



23.98% 
16.32% 
10.09% 
17.74% 
28.08% 
27.40% 



5.61% 20.03% 



.002766 105.22% 105.93% 



^ . 



f N 



62 

From the figures contained in the extensive audit of the Borden Com- 
pany, the accountant has submitted a summary consisting of a statement of 
the unit cost of the distribution of a quart of Grade "B" milk for October. 
1917, whether sold in bottles on retail routes, or in bottles at wholesale 
to retail stores, or in bottles at the company's own stores, Or by the quart 
from cans. This statement is shown in the following tabulation: 

Statement of Unit Cost of Distribution of a Quart of Grade ''B" Milk, for 
October, 1917, Sold— (a) In Bottles on Retail Routes; (6) In Bottles 
at Wholesale to Retail Stores; (c) In Bottles at Company's Otvti 
Stores; (d) By the Quart from Cans. 



■ 


(a) 

Quart 

Bottle 
Grade "B" 
Milk Sold 
on Routes. 


(b) 
Quart Bottle 
Grade "B" 
Milk Sold to 
Retail Stores 
at Wholesale. 


(c) 

Quart Bottle 

Grade "B" 

Milk Sold 

at Company's 

Own Stores. 


(d) 

Quart of 
Grade "B" 
Milk Sold 
Wholesale 

in Cans. 


Cost of Flurd 


.074250 
.001366 
.004400 
.002561 

.014091 
.008440 


.074250 
.001366 
.004400 
.002561 

.014091 
.008440 


.074250 
.001366 
.004400 
.002561 

.014091 
.008440 


.074250 
.001366 
.004400 
.000320 

.008354 
.008440 


Country Overhead 

Country Handling Expenses 

Bottles and Cans 

City Pasteurizing Plant and 

Bottling Expense 

Freight 

Sub Total 

Delivery Overhead 

Delivery Direct Expense... 
General Administration 

Total Cost of Distrib- 
ution 


.105108 


.105108 


. 105108 


.097130 


.002331 
.035280 
.001710 


.002331 
.025238 
.001710 


.002331 
.024449 
.001710 


.000699 
.007040 
.000513 


.144429 


. 134387 


.133598 


.105382 


Selling Price, Retail 

.Selling Price to Grocery 

Stores 

Selling Price in Own Stores 
Selling Price in Cans 


.14 


.13 


!i4"' 


;i6" ■ 


Profit per Quart 


.004429 


.004387 


.006402 




Less per Quart 




.005382 





From the above tabulation it appears that on Grade B bottle milk sold 
from wagons or to grocery stores there is a loss of more than 4/10 of a cent 
per quart. On wholesale milk sold in 40 quart cans there is a loss of 
more than 5/10 of a cent per quart. On the other hand, in milk sold from 
the company's own stores in bottles at 14c. per quart there is a profit of 
.006402 per quart. If this milk were sold at 13c. per quart there would be a 
loss of .003598 per quart. 

There is no reason to believe that it would be to the advantage of any 
of the large retailers of New York City to do business at a loss. 



63 

The severe losses sustained by several of the companies during the 
year 1917 is clear indication of the fact that even the recent advances in the 
retail price of milk have not been sufficient to pay the cost of delivery with- 
out serious losses to the majority of the retailers. 

A careful audit of the books of the Borden's Farm Products Co. estab- 
lished the integrity of the cost items entered on their books and these are 
substantiated by the statement obtained from the books of the other com- 
panies. 

The list of cost items cannot be shortened in any way under the pres- 
ent system of distribution, and the size of each item seems not only to be 
reasonable under present conditions, but, as a matter of fact, too small to 
permit the payment of dividends on the stock invested in these companies. 

10. Surplus Milk. 

One of the most serious problems facing the industry, whether of the 
producing or distributing branch, consists in surplus milk. This surplus 
is due to the fact that the supply does not correspond with the demand. 
At the season of the year when cows are first put on pasture there is a great 
over-production. During the hot weather of July and August there is 
usually a shortage. Again in October, when grain feeding begins, there 
occurs an increase in production, although not so great as in May and June 
and not exceeding the demand. 

Just how great the volume of surplus milk is in the New York market 
is shown by the chart on page 64 . 

The solid line shows the quantity of milk produced by the dairy farmers 
shipping milk to New York City for each month of the year. This fluctua- 
tion in quantity was ascertained by a comparison of the quantity of milk 
produced at a large number of the shipping stations in the producing terri- 
tory. It will be noted that the volume enormously increases during the 
months of May and June and decreases during the months of July, August 
and September, rising again during October. The dotted line in the 
chart shows the quantity of milk annually consumed by New 
York City. This is made up by study of the quantity sold in the 
city for each month during several years past. It is clear that the supply 
produced on the dairy farms shipping to New York City does not corre- 
spond at all with the quantity consumed. During that period of the year 
when the supply exceeds the demand there is a surplus which cannot be 
sold as fluid milk and must be marketed as one of the milk products, either 
butter, cheese, condensed milk, milk powder, casein or milk sugar. The 
greater part of this surplus is manufactured into butter, and the butter price 
is a fair estimate of the price at which the surplus can be marketed. During 
that period of the year when there is a shortage of milk, because the quan- 
tity produced is less than the quantity consumed by the city, this shortage has 
to be made up by the distributors, who obtain an additional supply of milk 



64 



ii 




« 



65 

from territory outside of the regular fluid milk zone or from shippintr 
stations which during most of the year are producing butter and cheese. 

A study of the chart showing the fluctuation in the supply and demand 
for New York City shows that the annual surplus average for five years 
amounted to 6,857,000 forty-quart cans, or 582,945,000 pounds. If the 
average butter fat on this market was 3.6 per cent, each 100 pounds of milk 
would make 4.4 pounds of butter and 88 pounds of skim milk. 

It must be borne in mind that, since milk is perishable, all surplus milk 
must be handled and sold as surplus, and unless artificial refrigeration is 
widely practised cannot be used to make up deficits occurring at other times. 
Consequently, it is not proper to subtract the shortage from the surplus, 
but to consider the entire surplus as milk that must be marketed at a 
less price than the fluid supply. In the chart showing the quantity of 
surplus milk produced by the dairymen shipping to New York City during 
the period of five years, the amount of surplus milk amounted to 582,945,000 
pounds per year. If this were made into butter from 30 per cent cream and 
the butter and skim milk were marketed the amount of money received is 
shown in the following table: 



Products. 



Butter at .3884 Butter at .3884 Butter at .3884 
No. of lbs. Skim at .75 Skim .50 Skim .00 



Surplus 582,945,000 

Butter (82%' fat) 25,649,580 $9,962,286.87 $9,962,286.87 $9,962,286.87 

Skim 512,991,600 3,847,497.00 2,564,998.00 

Butter Milk 44,303,820 



Total Receipts $13,809,783.87 $12,527,284.87 $9,962,286.87 

If sold as milk at $2.44 per 100 $14,223,858.00 $14,223,858.00 $14,223,858.00 

Loss $414,074.13 $1,696,573.13 $4,261,571.13 

Loss per 100 lbs. surplus .071 .291 .731 

Loss per quart surplus .00153 .00626 .01572 



Loss on surplus applied to entire supply, 
per quart 



,00042 



.00173 



.00436 



In the above table the price of butter is quoted at .3884, which is the 
average for the past year; and the price of milk at $2.44 per hundred 
pounds. Skim milk is sold at various prices. In the table 75c. per 
hundred, 50c. per hundred and zero are used. Buttermilk is often not 
marketed at all, and the price has, therefore, not been included. 

In the above tabulation it appears that the losses on surplus milk, when 
made into butter and the skim milk sold at 75c. per hundred, would be more 
than $414,000.00 per year. With skim milk at 50c. per hundred the losses 
would be $1,696,573.13 per year, and if the skim milk were not sold at all 
the loss would be $4,261,571.13 per year. These figures mean losses per 
hundred pounds of surplus milk of .071, .291 and .731. If the losses on surplus 



ft 






66 

milk are applied to the entire supply and the surplus milk is sold for butter 
only, with no returns for skim milk or butermilk, the tax of the surplus on 
each quart of fluid milk sold in the city would be .00436, or nearly half a 
cent a quart. 

If the figures for the quantity of milk consumed by New York City and 
the quantity produced by the dairy farms are tabulated, the monthly fluctua- 
tions and differences between the supply and the demand are plainly shown. 
For example, in the month of May, during the last three years, New York 
City has consumed 2,367,000 cans of milk, while the dairymen produced 
4,420,000 cans, creating a surplus of 86 per cent. On the other hand, for 
the month of August the average for three years shows that the city con- 
sumed 2,299,000 cans of milk, while the dairy farmers produced during that 
month only 1,380,000 cans, creating a shortage of 40 per cent. Again, in 
the month of January, averages show that the city consumed 1,806,000 cans, 
while the dairymen produced 2,140,000 cans, creating a surplus of 18j^ 
per cent. 

During the entire year, adding all surpluses and subtracting all deficits 
shows a net surplus over and above the demand of 18j^ per cent. That is 
to say, the dairymen shipping milk to the City of New York actually pro- 
duced 18J^ per cent more milk than the city can consume as fluid milk. 

Surplus milk is commonly made into butter, cheese, condensed milk and 
milk powder. These milk products sell most of the year at prices which 
result in a loss for milk manufactured into them from the regular sources 
of the fluid milk supply. The retailers in fluid milk in the past have been 
compelled to buy all of the milk produced by the dairymen in the dairy 
districts where their shipping stations are established. In recent months 
three new factors have had a marked influence on surplus milk. 

(1) The great advance in price of fluid milk, which has reduced the 
demand, thereby creating an artificial surplus. For the first time in ten 
years there was more milk produced in August than the market 
would consume. While this was partly due to weather conditions it is 
believed it was largely due to the stimulation of higher prices paid to the 

•producer and to a lessened demand on the part of the consumer. One retail 
company was compelled to manufacture in July 2,625,000 quarts of milk 
into butter, making 254,727 pounds, costing 51}4c. per pound, while the 
market price for butter was 46c. per pound. This same company manu- 
factured 2,451,000 quarts of milk into cheese, at a cost of 27c. per pound, 
while the market price for cheese was 24c. per pound. At the price which 
producers received for their milk in October, butter would have cost 81c. 
per pound. 

(2) Another influence was the agreement between the producers' and 
distributors' organizations, whereby the distributors closed up shipping 
stations where the supply exceeded the demand. This resulted in the closing 
up by one retail company of 21 stations, and another retail company of 39 
stations during the month of October. 



3? 



67 

(3) The new market for condensed milk furnished by the war orders 

of the Allies. 

These war contracts guarantee a profit above cost, so that condensories 
are in a position to compete with the fluid milk market for the supply. This 
has furnished producers with an outlet at higher prices, which has fortified 
them in their demands for higher prices in the market for fluid milk. The 
fact that Health Department regulations do not apply to condensed milk 
has increased the influence of the competition by these condensories. 

So long as all milk purchased from a producer by the distributor is 
paid for at the full market price for fluid milk, there will be a loss on surplus 
milk manufactured into butter and cheese. Butter, cheese and other milk 
products are normally manufactured out of milk which does not reach the 
fluid milk market, and is produced by farmers who do not receive the full 
price for fluid milk. Consequently, the price of butter and cheese will always 
be controlled by the price of milk outside of the territory supplying the fluid 
milk market. 

No adequate solution has yet been offered for the handling of surplus 
milk without serious losses either to the producer or the distributor of milk. 
If the surplus is thrown into the hands of the distributor he sustains the 
losses and is compelled to make up such losses by additional charges for fluid 
milk. On the other hand, if the surplus milk is thrown into the hands of the 
producer he is compelled to sustain losses on milk manufactured into butter 
or cheese or through the disposition of surplus milk at prices lower than the 
market prices for the fluid product. 

In this emergency a suggestion has recently been proposed which seems 
to be worthy of consideration. This consists in a plan whereby the handling 
of surplus milk and the losses from the same shall be shared jointly both by 
the producer and the distributor. Since the fixing of prices either by the 
industry itself or by a commission necessarily interferes with the normal 
workings of the laws of supply and demand, it is certain that it is not possible 
by price fixing to furnish any guarantee that surpluses and deficits will not 
occur. Under these circumstances the same mechanism which fixes prices 
should include an adequate provision for protecting the industry against 
damages directly due to price fixing which results in losses from surpluses or 
deficits. The plan suggested, in brief, provides for the payment of full price 
for all of the fluid milk which can be sold at full price and for the payment 
at less than full price for all fluid milk which must be handled as surplus, 
the price paid for such surplus to be the price at which the fluid product can 
be sold as surplus milk for manufacturing purposes, either butter, cheese or 
other milk products. The butter price may be accepted as probably the 
fairest basis for determining the price of surplus milk. 

This plan was actually put into operation at a milk shipping station at 
Homer, N. Y., where, because of business conditions, the entire product 
could not be marketed at full price. The dealer and the producers voluntarily 
agreed to co-operate for the handling of surplus milk. The producers agreed 



% 



V f 



'J 



ll 



M 



J 



'i;> 



68 

to receive payment at full price for all fluid milk that could be sold at full 
price and to accept payment for the balance, or surplus milk, at whatever 
price the surplus milk would bring when sold either for milk powder or 
otherwise. 

If producers enter into agreements with each other for collective bar- 
gaining with the distributors, and distributors enter into agreements with 
each other for collective buying from producers, a mechanism is furnished 
whereby surplus milk can be easily handled in a way entirely fair and just 
to both parties. To illustrate this the following example may be taken : 



Dealer. 

1 

2 

3 

Total 

Percentage 



Pounds of Pounds of Surplus 
Milk Bought. Milk Sold. Milk. 



10,000 
20,000 
50,000 



8,000 
12,000 
45,000 



2,000 
8,000 
5,000 



80,000 
100% 



65,000 
81.25% 



15,000 
18.75% 



In the above table it appears that there was 80,000 pounds of milk 
purchased, of which 65,000 pounds was sold as fluid milk, amounting to 
81.25 per cent; the balance, 15,000 poimds, was surplus milk, amounting 
to 18.75 per cent. In this way the quantity of milk purchased by all 
retailers of the City of New York and the quantity sold as fluid milk and 
the quantity of surplus could be estimated at the end of each month and the 
percentage of surplus milk stated. In the above example it is suggested that 
the producers be paid for 81.25 per cent of all the milk produced by them at 
the full fluid price and that they be paid for 18.75 per cent of the milk at a 
price which corresponds to the full market price for butter, plus the full 
market price for by-products of butter, including skim milk and buttermilk. 
Such a plan would require that some person, or commission, in whom both 
producers and dealers had confidence, should furnish a statement of the 
total quantity of fluid milk bought and sold as fluid milk and of the total 
quantity of surplus milk which could not be sold as fluid milk, but must be 
manufactured into milk products. 

From the producers* standpoint this plan pays the producer all that he 
could possibly secure out of the business if he were marketing the milk 
himself. The producer could not expect to sell as fluid milk any more fluid 
milk than the market will absorb. Consequently, if the retailer were elimin- 
ated and the producers were retailing their own product, the surplus milk 
unsold as fluid milk and thrown back on their hands would be the same 
surplus which would be in the hands of the distributors under the plan 
above mentioned. The price producers would receive for this surplus would 
be the same price they would receive from the dealer in the above mentioned 
plan. 

It is a fact that the distributor is in a much more advantageous posi- 
tion than the producer for the handling of surplus milk, both in the processes 



69 

of manufacture and in the matter of marketing. The producer could not 
expect to manufacture surplus milk or market the same in any different 
way or any more cheaply than these processes can be performed by the large 

distributor. 

The particular value to the producer of pooling his interests and arriv- 
ing at a percentage of fluid milk and a percentage of surplus milk which 
is uniform for all producers is that payment would be entirely uniform for 
all producers. The irregularities of milk production in different districts 
and the differences in the marketing facilities of different dealers have for 
many years been imposing great hardships or given advantages to producers 
and distributors which are unfair to the industry as a whole. If uniformity 
of market price is so desirable that producers recognize the importance of 
united action, then it is a logical corollary that there should be uniformity in 
the percentage and in the price of surplus milk and that all farmers and 
distributors should be treated alike in this matter. 

The payment for fluid milk and surplus milk, according to the percent- 
age of the entire supply sold as fluid milk and manufactured as surplus milk, 
would, however, entail a severe hardship on the distributor if his percentage 
of fluid milk sold and surplus milk manufactured did not correspond to the 
percentages of the entire supply. For example, in the tabulation above given 
we can assume that each of the three dealers is compelled to pay for 81.25 
per cent of his fluid milk at full price and for 18.75 per cent of his milk at 
butter prices. Under these conditions the following tabulation indicates the 
result : 



Dealer. 



Total 
Purchases. 



Paid at 
Full Price. 



Overpaid. Underpaid. 



1 10,000 

2 20,000 

3 50,000 



8,125 
16,250 
40,625 



125 
4,250 



4,375 



In the above table it appears that if each dealer should pay to his 
producers at full price for fluid milk for only that portion of his supply 
which corresponded to the total percentage of fluid milk sold on the entire 
market, dealer No. 1 would have overpaid for 125 pounds, dealer No. 2 
would have overpaid for 4,250 pounds, while dealer No. 3 would have under- 
paid for 4,375 pounds. In the former table it appears that dealer No. 3 
actually marketed 45,000 pounds at full price, but in the lower table he 
paid for only 40,625 pounds at full price. On the other hand, dealers 
No. 1 and 2 paid for more than they sold at full price. In short, dealers 
Nos. 1 and 2 would sustain losses by this transaction, while dealer No. 3 
would have an unfair gain. It is obvious that the adjustments could be easily 
made by the dealers themselves through some form of exchange or clearing 
house, whereby those dealers who have sustained undeserved losses can be 
recompensed by those dealers who have made unmerited profits. The 



« ij 



I 



1 

I 

I? 

I: 

■1 

I 



i 



M 



70 

undeserved losses and the unmerited profits are exactly equal to each other, 
consequently the exchange could bring about an adjustment between the 
dealers of these differences without affecting their individual business 
interests in the slightest degree. 

The above plan has actually been proposed by the large distributors 
in the city of Boston and is under consideration at the present time as a 
solution of the surplus milk problem there. The closing up of the plants 
recently agreed upon between the Dairymen's League and the New York 
City distributors is certain to result in disastef and injury either to the 
producers themselves or to the distributors. On the other hand, since both 
producers and distributors are interested in the same market and in selling 
to that market all of the high price fluid milk that the market will absorb, 
it would seem that they have a common interest in protecting each other 
against losses from surplus milk by adjusting the manufacture and the sale 
of surplus milk among themselves so that the burden is evenly distributed 
among all producers and dealers. 

11. Market Prices and Price Fixing. 

When differences occur, as they necessarily must, between the price 
demanded by producers for their product and the price offered for the same 
by the distributors, it is most natural to assume that the consumer, as well 
as the industry itself, can be best protected from injury through the action 
of a disinterested tribunal endowed with sufficient authority to fix prices 
for the producer, distributor and consumer. Uniform prices ajid price fixing 
is a remedy which, because of the emergency created by war time conditions, 
has been seized upon as the only adequate remedy for excessive prices of 
food products. War time emergency does create a condition which artificially 
interferes with the influences which normally control prices, to such a 
degree that such an artificial remedy as price fixing may be justified. On 
the other hand, there are certain inherent faults in any plan of price fixing 
which are so serious that in the long run such a plan, even when carried out 
by a fair-minded and intelligent tribunal, is apt to bring disaster either upon 
the producer, distributor or consumer. 

It seemed proper for this Committee to take up for consideration at 
least the principles of price fixing, in so far as these have been determined 
by those who have specialized in the science and philosophy of economics. 
With that purpose in mind, the Committee requested Prof. Robert E. 
Chaddock, of Columbia University, to attend a conference to which were 
invited the representatives of the producers and dealers organizations. An 
abstract of the statements made by Prof. Chaddock at this conference is as 
follows : 

" In any price-fixing program such as has been carried out by the pro- 
ducers in recent months the assumption is very likely to be made that the 
commodity (milk) is inelastic, that is, that the demand will not change very 



71 

much with a change in price. Of course, that is not true * * * as has 
been shown in connection with the decreased consumption resulting from 
the high price of milk to the consumer, so that, in the sense that the demand 
does change with a change in price, milk is an elastic commodity. 

" The producers are producing under varying conditions of cost * * * 
some are producing at a greater cost and some at a lower cost. The 
marginal producer is the man producing under the most unfavorable con- 
ditions. I do not know what the range is between the marginal producer and 
the man producing under most favorable conditions, but it must be a pretty 

wide range of cost. 

" Any cost price must refer to a specific quantity. * ♦ * We natur- 
ally drop the marginal man out first. 

" Any rigid price fixing precludes the cutting off of that most unfavored 
producer to decrease the supply in response to a decreased demand. * * * 
No flat rate for milk is desirable, because there is no command of the 

conditions. 

" Where a monopoly is had the price is determined by the control of the 
supply. No one can control the demand. The monopolist by controlling the 
supply controls the price. He slides his price up and down till he gets to the 
price where the largest profits are obtainable. 

" Monopoly price fixing by producers is very likely not to work out 
permanently for the benefit of producers themselves, because price fixing 
is a two-sided problem. 

" If New York City has to have two and one-half million quarts a day 
for its needs, then it would have to pay such a price as would bring in to 
the market two and one-half million quarts. 

" It seems to me that the middleman agency is probably the best qualified 
to determine the price. Your middleman is in a strategic position to know 
what he can buy a given supply for, and on the other hand what he can 
get people to pay for that supply. The consumer wishes cheap milk and 
the producer wants to receive as large an amount as he can. Neither one 
of these parties has the facilities for getting together to determine the balance 
between the force of the demand and the force of the supply. The middle- 
man's interest combines the interest both of the consumer and the producer. 
The interest of the middleman ought to be to sell a larger amount of milk 
at a smaller margin of profit per unit, rather than to sell a smaller quantity 
at a higher price. 

" If we are to pay the farmer enough to get him to produce the supply 
and still sell the supply when we have got it, we have got to, by every 
means possible, reduce the expenses in the distributing function. 

" I doubt the efficiency of the City as a distributor of milk. I consider 
that as a very last resort. I have not very much faith in the efficiency of 
the City of New York in conducting the milk business. 

" In justice to all producers no flat rate could be fixed which would 
treat them equally. 



t' 



72 

" I doubt whether you can fix a price in any arbitrary or rigid way. 
The middleman must bid for more milk as he needs it. It is proper for a 
dealer to buy milk in Vermont at a different price from the price he pays 
in Pennsylvania. 

" I think it is economically unsound for the Dairymen's League to fix 
prices for six states, because the price fixed will not be on the principle of 
responsiveness to the demand. 

" I do not believe you can put this thing in the hands of a rigid price- 
fixing commission, providing you admit that New York has to have a certain 
milk supply. 

" In the distribution of milk it will be in the interest of the consumer to 
bring less competition into distribution and to get the cheapest distribution 
possible. 

" I think we ought to limit competition and provide for such combina- 
tions as will permit the cheapest kind of distribution. 

" The next step in an American community would be to have some kind 
of a Public Service body to demonstrate costs on some practical basis and 
to show that the margin of profit is not too large." 



12. Economies in Production. 

Larger Producing Cows. 

For many years dairy farmers have been well aware of the economies 
in milk production resulting from the keeping of dairy cows which are large 
producers. 

Nimierous cow-testing associations have as their primary purpose the 
testing of cows in local dairy herds, in order to inform the dairymen as to 
those animals which are low and unprofitable producers and those animals 
which are high and profitable producers. Numerous statistics have been 
compiled to show the cost of producing milk as it is modified by the pro- 
ductivity of the individtial dairy cow. A good example of this difference is 
shown in bulletin No. 501 — United States Department of Agriculture, 
entitled, " A Study in the Cost of Producing Milk on Four Dairy Farms." 
These figures are taken from data compiled several years ago on costs much 
lower than present costs. They show clearly, however, the relation of the 
productivity of the cow to the cost of milk, for the reason that the same 
costs were applied alike to all cows at that time : 



Production in Pounds, 
Per Cow. 
2,349 
3,648 
4,596 
5,450 
6,445 
7,513 
9,049 



Cost Per 100 Lbs. 
of Milk. 

$3.57 
2.59 
2.29 
2.10 
1.86 
1.79 
1.70 



# 



n 

Another set of figures was presented by Prof. W. P. B. Lockwood, of 

Massachusetts Agricultural College, in his testimony before the Committee. 

He showed statistics compiled by him indicating the following results : 

Cost 
Production Per Cow Per Year. Per Quart 

Less than 5,501 lbs 0721 

5,501—7,500 lbs 0624 

Over 7,500 lbs 0552 

The third set of figures was presented in the testimony of Prof. George 
C. White, of Connecticut Agricultural College, Storrs, Connecticut. These 
results have been tabulated in the form of the chart shown on page 74. 

The productivity of the dairy cows supplying milk to New York City 
market averages not more than 4,500 pounds per cow per year. In the above 
tabulation such cows make milk at a cost of about 7c. per quart, which 
price corresponds closely with the cost as determined by all of the data 
compiled on cost of production of the city's supply. There is no doubt 
that if the city's supply came from cows which were large producers, the 
cost of production would be considerably reduced. 

From this it appears that, in herds containing over ten cows, the pro- 
duction per cow and the cost per quart of jplk gave the following figures: 

Production Per Cow Per Year. "^ll^ ^^^ Quart. 

Over 7^00 lbs v . . . : :: :. ;^ . . . . 4.74c. 

6,500-7,500 5.48 

5,500—6,500 5.60 

4,500-5,500 5.82 

Under 4,500 ?. 02 

i 

Only a small percentage of the dairymen supplying New York City are 
members of the cow-testing associations. There is no doubt that there 
is a large percentage of cows standing in the herds of dairymen producing 
milk for New York City which are low and unprofitable producers of milk. 
These animals can be eliminated immediately by fattening and selling for 
beef. They are actually an expense to the dairyman and add an item to the 
cost of milk which is an improper tax on the consumer. 
Larger Dairies. 

Another factor which has not received the attention it deserves is the 
size of the dairy herd itself. It makes a great difference how many animals 
are included in the dairy herd. It is one thing for a farmer to devote his 
time and attention to the care of one dairy cow and quite another thing 
for him to attend to the care of a large herd. The cost of keeping a cow 
by herself and as a member of a large herd are very different. 

It is clear that a number of the expenses included in the cost of pro- 
duction do not increase as rapidly as the size of the herd. This is well 
illustrated in a review of the statistics of 178 herds reported in Bulletin 
No. 7 of the Connecticut Agricultural College. 

When these herds are arranged in order of size, with the corresponding 
costs of milk production, it appears that herds of 50 or 60 cows produced 



DELCEASLin C05T OFPQODUCIMQ PIILK 

A5 AMOUhT Or MILK PEG CO/ IMCDEJ\5L5 

Based on da-fa from Bolle+m Nfi7 

Connecticut A<fcrieuHoral Col|e.<5e^ 

fTxi-endion 3«Lrvioe. 

for all 178 herds listed V////A 



^^r 151 herds con+einin^ 
over lO Cows — 



] 




IbSofMilK under over 

SnoSl^ 4500 4500-5J00 ?500-b5OO 650O-T50O JJOO 



75 

milk at a cost of 4.65 cents per quart, while herds of only 7 to 10 cows pro- 
duced milk at a cost of 6.67 cents per quart. If only these herds are selected 
which contain cows producing over 6,000 pounds of milk per cow annually, 
we find that there are 85 of these, and that the decrease in the cost of pro- 
duction as the size of the herd increases is even more regular. 
The results are shown in the chart on page 76. 

The figures in this chart in the form of tabulation show the 
following : 

Number of Number of Cows 

Herds. in Herd. Cost Per Quart 

6 30—40 4.65c. 

21 ;;"...;...'.'...; 20-^ 4.97 

45 10—20 5.45 

13 '.*.'.'...'.*....'...■.'. 7-10 5.92 

Collective Hauling. 

Statistics from 11 milk shipping stations show that 453 farmers' wagons 
are used to haul to the station 1,181 forty-quart cans of milk. This is a 
little less than three cans to a wagon, average distance of the dairy farms 
being under three miles. On a two-horse country truck it is possible for 
one man to haul 30 forty-quart cans of milk. Through collective hauling 
by such trucks at these 11 stations it would require only 44 such wagons to 
haul the same milk that was hauled by the 453 wagons. 

If these figures should be applied to the entire milk supply of the 
city it would mean that there were now 12,500 farmers' wagons carrying 
milk, from dairy farms to shipping stations, which could be carried by only 
1,250 wagons. In other words, there are ten times as many farmers hauling 
milk to shipping stations as there need be. These figures are probably 
somewhat exaggerated, as many large shipping stations have instituted a 
system of collective hauling. It seems certain, however, that the duplication 
of wagons hauling milk to country shipping stations is much greater than 
the duplication of wagons delivering milk in the city. It is obvious that the 
saving through the institution of a proper system of co-operative hauling 
would be very great, and that this saving would be felt by the consumer, 
who eventually must pay the bills for this service. 

Collective Buying of Grain. 

The largest single item in the cost of milk is the cost of grain. Little 
success has resulted from attempts so far made at collective buying. The 
dairymen shipping milk to New York City use approximately 671 car loads 
of grain per month, each car carrying 25 tons, amounting to 16,780 tons of 
grain, at $55.00 per ton, which is $923,230.00 per month, or $11,078,760.00 
per year. This makes the dairymen supplying milk to New York City, as a 
group, the largest single customer of grain in the world. It seems fair to 
assume that if this grain were purchased through one agent, and the size 



tii^ 



»i 



75 



DECPLASL in C05T OF PDODUCIM6 MILK 
A5 6IZL or HLDD IHCDLA5L5 

Based on dota from Bulfetiri 11^ 7 

Connecticut Agricultural College 

extension Service 



For all IT&herd^ lifted 

for 65 herd^ producing over 
6000lb$ of Milk per Cow dnnaally 



-C 




)l«r4 



I0£0 2030 CXMO 4O50 5(>«) 



77 

of the order were guaranteed, some consideration ought to be given to the 
size of the order. Inquiry of one of the largest grain merchants of the 
New York Produce Exchange has elicited a reply, which is in part as 
follows : 

" The ordinary dairyman is not usually in a position to buy feed in car 
load lots, and must therefore buy from a retail dealer, who must charge 
about 10 per cent more than he pays for the goods, and not having storage 
capacity must also buy frequently, preventing him from availing himself of 
markets when they are lowest * * *. Collective buying through a pur- 
chasing agent of immense quantities makes possible purchases whenever the 
markets warrant, and the buying of enough to tide over what might appear 
to be a steadily rising market. Under these conditions there should be saved 
at least 10 per cent on the purchase of feed, as compared with the system 
under which feed is now purchased." 

Ten per cent on $923,230.00 per month would be $92,323.00. This 
would be a net saving to the consumers of New York City of $1,107,876.00 
per year. This item alone would reduce the cost of milk l/5c. per quart. 

Teaching Dairying in the Public Schools. 

Laws requiring instruction in agriculture in the common schools have 
been enacted in the following States : 

Alabama, Kansas, California, Florida, Louisiana, Mississippi, North 
Carolina, Oklahoma, Tennessee, West Virginia, Wisconsin, Indiana, 
Wyoming. 

In Missouri, North Dakota, Ohio and Texas they have a law requiring 
that agriculture be taught in rural schools. Idaho, Pennsylvania and Utah 
require only that agriculture be taught in rural high schools. The follow- 
ing states give aid to a department of agriculture in high schools: Iowa, 
Kansas, Louisiana, Maine, Maryland, Massachusetts, Mississippi, Missouri, 
New York, North Dakota, Texas and Wisconsin. There is a decided 
sentiment in favor of the use of rural public schools as centers for instruc- 
tion in those things which are most vital to the prosperity of the community 
in which these schools are established. Dairying being a business so vital 
to the prosperity of so many of the largest rural communities, would justify 
the use of rural public schools as places where regular instruction is given 
in management and care of the dairy herd and in the proper methods of 
milk handling. In a number of rural high schools in the eastern states 
this is already being done. 

The great influence of the rural school in developing better dairy farmers 
and dairy employees has not yet been fully realized. As a consequence, 
the Departments of Education of the six states furnishing milk to New York 
City have not yet undertaken any widespread campaign to transform the 
character of education dispensed through rural schools into one better 
adapted to the needs of the communities in which they are located. Some 
of the economies in milk production would immediately result from the 






78 

establishment of educational courses of this kind. Others would be more 
remote, but in due time of permanent value in putting the business of milk 
production on a sound and economical commercial basis. The results which 
have been achieved by a niunber of public schools in rural commvmities 
where such a type of education has been practised are so remarkable that 
they justify not only the serious attention of the educational authorities but 
the conviction that herein lies one of the most important influences for 
bringing about increased economy and efficiency in the production of milk. 

Local Bookkeepers. 

One suggestion which has been made for bringing about economies in 
milk production is the establishment of a simple standard method of keeping 
cost accounts on dairy farms. It has been very commonly noticed that only 
a small percentage of dairy farmers make any attempt to keep cost accounts 
accurately. Many systems of bookkeeping have been devised for the use of 
dairy farms, some of which are very commendable because of their sim- 
plicity. The thing which has been lacking, however, is an influence which 
would bring about the adoption of some one of these good systems. It is 
one thing to devise a system and quite another to secure its adoption by the 
dairy farmers. As a means of overcoming this one of the large distributors 
has suggested that some one person in each dairy district be designated as 
the official bookkeeper for all of the dair3mien in that district. The sug- 
gestion is that this person be employed by the entire group of dairymen 
for such portion of his time as would be necessary to visit each dairy af 
least once each month and assist the farmer in making entries of cost items 
on the blanks supplied for a standard method of cost accounts. It is be- 
lieved that the expense of this service to each dairyman would be very small, 
because the time of the bookkeeper would be shared by a large group of 
dairies. The advantages of keeping cost accounts are so well known and 
their influence in bringing about increased economies and efficiencies that 
the suggestion of the nomination of a local bookkeeper in each dairy district 
seems well worthy of attention. 

Aid from Country Banks. 

It has become a practice in recent years for country banks to assist 
farmers in the purchase of high grade dairy cows. Many banks in the 
states of Iowa, Wisconsin, Illinois and other western states have for 
several years made a practice of buying cows for dairy farmers and placing 
them on dairy farms under easy financial conditions, with the understanding 
that the farmer may use the bank as a depository for the money received 
from the production of the cows, which in the course of a few months pay, 
through the sale of their milk, the full purchase price. 

More recently this practice has been taken up by banks in Pennsylvania 
and Massachusetts. For example, the Plymouth County Trust Company of 
Brockton, Massachusetts, during the eighteen months ending September, 



79 

1917, purchased 13 carloads of cows averaging 25 head to the car for dairy- 
men oi that district. For this purpose the bank employed an experienced 
purchasing agent, the bank loaning two thirds of the value of the cows on 
notes. This bank asks a payment of one-third in cash and accepts notes 
for the remaining two-thirds. It is obviously to the financial advantage 
of the country bank to increase the cow population of their district as a 
direct method of increasing the amount of money on deposit by dairy 
farmers. 

City Cows, 

At the present time in the limits of New York City there are 
located 90 dairies, containing 4,500 cows producing 50,000 quarts of milk 
daily. The list of cost items for the milk dispensed by these dairies to nearby 
consumers has eliminated from it certain cost items which attach themselves 
to the bulk of the supply furnished to this City as follows : 

Hauling to the country station gg^ S^J 211art 

Country station charges ; ;• ;; • ;;; ;;^ :0084 per quart 

HauHng froin'railroad station to city' 'plant -^^ P«r ^^^ 

Total ^^ P^*" **"*^ 

The elimination of these four items of expense amounts to 2 1/3 cents 
per quart. As an offset to this, these city dairies have to pay higher rents, 
taxes, wages, and other overhead items. 

The objection to city cows is the confinement in narrow quarters with- 
out pasture, the nuisance of stables near dwellings and possible effect on the 
health of cows by city conditions. On the other hand, since the cost of 
grain and other feed such as baled hay, beet pulp, brewers grains, etc., is no 
higher in the city than in the country, there may be some financial advantages 
to be gained in the keeping of city cows that justify a consideration of the 
proposition from the standpoint of economics. There are some students of 
the question who go so far as to suggest that, at least for the use of infants 
and children, cows, kept in large units in the outskirts of the city, under 
first class business management and ideal sanitary conditions, would fur- 
nish a cheaper and cleaner milk than can be secured in any other way. The 
suggestion is novel but is one which seems worthy of further consideration 
both from an economic and sanitary standpoint. 

13. Economies in Distribution. 

Centralizing Distribution. 

In the report of the Milk Committee appointed by the Food Controller 
for Canada, published November 24, 1917, the committee says that the cost 
of distribution, or the " distributors* spread," varied, from the evidence sub- 
mitted, from 2.75c. to 6.50c. per quart depending on local conditions, and 
that this excessive spread is caused chiefly by the excessive number of 



V 



distributors and varies about in the same ratio as the number of distribu- 
tors. For example, in Ottawa, where one dairy handles about 75 per cent 
of the milk supply, the " spread " is only 3.25c. per quart, while in Toronto, 
where there are about 90 distributors, it is 5.25c. per quart. The Committee 
says, further, the effects of this unnecessary duplication, are: 

(a) Excessive capital employed. 

(b) Excessive dairy costs, 
(r) Overlapping in delivery. 

(d) Excessive loss in bottles. 

(e) Diversion of great numbers of men and horses from pro- 

ductive employment 

(In addition may be mentioned duplication of administration costs, 
selling costs, properties, including real estate, buildings and machinery, both 
country and city.) 

On this subject Mr. Weiant, President of the Borden's Farm Products 
Co., Inc., in his testimony stated : " There are operating expenses in the 
country that are duplicated and could be removed. It would be possible to 
have full cars come through instead of part cars. Pasteurizing plants could 
maintain a full flow and at a maximum capacity. Wagons could be filled to 
capacity and operated in a small area. If the plan were worked out com- 
pletely there would be necessarily no duplication. I believe if the dealers 
are given an opportunity to work on that problem they will solve it." 

The data collected by this Committee shows that there is duplication of 
effort in the country at collecting stations, inefficiency in transportation be- 
cause of broken car-load lots instead of car-load lots, duplication in hauling 
from railroad platforms to the city, duplication of bottling and pasteurizing 
in city stations, and, above all, duplication in the delivery wagons on the 
streets. 

Statistics of the delivery system suggest savings that would result from 
the elimination of competition and the substitution of a single-service de- 
livery. The statistics for New York City are as follows : 

Bottled milk supply 704,318 quarts 

Milk m cans 896,405 quarts 

Ketail wagons 4 975 

Wholesale wagons \ 1*522 

Average load of retail wagons '142 quarts 

Average load of wholesale wagons 14.7 cans 

Investigation shows that the maximum load for a retail wagon is 428 
quarts, consequently if the total volume of retail milk, amounting to 704,318 
quarts, were carried on retail wagons handling only full loads, the bottled 
milk of New York City would be handled by only 2,243 retail wagons in- 
stead of the 4,978 actually in use at the present time. This would mean only 
45.3 per cent of the present number, or a saving of 54.7 per cent of the 
total. 



In wholesale milk the maximum load for a two-horse wagon operated 
by one man is 75 cans per day. If all the wholesale milk, amounting to 
896,405 quarts, or 22,410 cans, were carried on wagons handling only 
maximum loads, the number of wagons required would be only 300, as 
compared with the 1,522 wholesale wagons now operating. This would 
be a saving of 81.3 per cent. 

These estimated savings of 54.7 per cent, on retail wagons and 81.3 
per cent, on wholesale wagons are, of course, ideals, assuming a perfect 
delivery system in every section of the city and that every wagon carries only 
a full load. Under practical conditions this would be impossible, even if 
delivery were in the hands of a single public service corporation. 

For a number of years milk has been retailed in Philadelphia for 2 cents 
less than in New York City. Philadelphia retail loads have averaged 300 
quarts to the wagon, while New York retail loads have averaged less than 
200 quarts to the wagon. This difference in load is chiefly responsible for 
the difference in the retail price. 

In the city of Ottawa, Canada, 75 per cent, of the business is in the 
hands of one distributing firm, which operates at a margin of only 3.25 cents 
above the cost of production, as compared with the margin of distribution in 
Philadelphia of five cents and in New York of seven cents. 

The Milk Committee appointed by the Food Controller for Canada 
reported on November 24, 1917, in favor of the " Unification and reorgani- 
zation of the milk distributing business," and cited the experience in the 
adoption of a single delivery system by the City of Regina, Saskatchewan, 
where a net saving of at least V/s cents per quart over the previous cost of 
milk resulted from the adoption of this system. 

An extensive questionnaire was submitted by the Committee to all the 
large dealers in New York City for the purpose of securing statistics regard- 
ing the location of country and city plants, the volume of business and the 
facilities for handling milk, the object being to ascertain the capacity of the 
present distributing system and the points at which duplication was occur- 
ring. While several of the large companies endeavored to answer the de- 
tailed questions contained in this questionnaire, the number of replies 
received was insufficient to make it possible for the Committee to determine 
by this method just what saving could be accomplished by eliminating the 
numerous duplications resulting from present competitive conditions. 

Powdered MUk. 

The lowest prices obtainable on powdered milk are : Skim milk powder 
in barrels of 150 pounds each, 21 cents per pound. Whole milk powder in 
barrels of 150 pounds each, 37 cents per pound. 

In fluid milk these prices are equivalent to a little less than 4 cents a 
quart for skim milk and about 9 J4 cents for whole milk. 

The fact that this powder when properly kept is almost imperishable, 
can be shipped long distances, and kept in storage, and can be used for 



M 



82 

cooking and manufacturing purposes and for practically all purposes for 
which fluid milk is used, justifies its recommendation as a substitute for 
fluid milk for that portion of the milk supply which is used for manufactur- 
ing purposes and for some cooking purposes. The shortage in the source of 
production of milk powder could well be remedied by the development of 
producing territory outside of the limits of the sources of fluid milk supply. 
It is undoubtedly true that many portions of the South, prevented from fur- 
nishing fluid milk by distance and by climate, could on account of the fertility 
of the soil produce milk cheaply if markets were developed for milk in pow- 
dered form. The use of milk powder for a considerable percentage of the 
market, not only for manufacturing but for household and cooking purposes, 
would relieve the pressure of high prices to some extent on such consimiers. 

Daylight Delivery. 

Daylight delivery of milk refers to operation of delivery wagons dur- 
ing the morning hours after breakfast, rather than during the early hours 
of the day before breakfast. The delivery of milk in the early morning 
hours before breakfast is a relic of the days in which municipalities received 
their supply from nearby farms without the advantages of refrigeration, it 
being customary for farmers to drive into the city immediately after the 
morning milking with fresh milk. The early morning delivery thus became a 
habit. At the present time, with milk coming from distances of several 
hundred miles and with the refrigerating facilities which now exist, there 
is no reason excepting habit why milk should be delivered before breakfast. 
In the summer months, because among the poorer classes ice is a luxury, it 
is proper to make an early morning delivery, but during at least six months 
of the year it is cool enough to prevent any disadvantages through tempera- 
ture. 

The City of Chicago since 1906 has practiced daylight delivery from 
October 1st to April 15th. For a number of years in the City of Boston 
there has been daylight delivery during the winter months. The City of 
Philadelphia adopted daylight delivery on November 15th of this year. 
There are other cities in America where this same system has been adopted. 
The advantages are: 

(1) Larger sales of milk; 

(2) Better collections of cash; 

(3) Better collections of empty bottles; 

(4) Less theft; 

(5) Better working conditions for horses and drivers; 

(6) Facilitates municipal supervision. 

The carrying of larger loads on the delivery wagons in itself means a 
decided economy in the cost of delivery. In Philadelphia, the dealers have 
already increased the loads on retail wagons and believe the increase will 
amount to 25 per cent. The saving on bottles and on collections also means 



83 

less expense to the distributor. There is no reason why daylight delivery 
cannot be adopted immediately in New York City. 

Retailing Milk from Grocery Stores. 

In response to a questionnaire sent out by the Committee to the dis- 
tributors of milk, replies were received from nine of the largest distributors 
stating the prices charged by them for milk sold to grocery stores during the 
month of November, 1917. The figures are as follows : 



Dealer. 



Price per Quart 
in 40 Quart Cans. 



Price per Quart 
in Bottles. 



1 
2 
5 
4 

5 

7 
8 
9 



Average 



9H-10C. 
9>4-10c. 

10c. 

10c. 
9H-10C. 

10c. 

10c. 

10c. 

10c. 

10c. 



13c 
12^c. 

13c. 
1254c. 

11J4C 

12-13c. 
13c 
13c 
14c. 

13c 



It has been believed that milk could be sold from grocery stores cheaper 
than it could be sold from retail wagons delivering the same directly to the 

homes of consumers. 

There is no doubt that it costs the dealer less money to carry milk to 
the grocery stores than to carry milk to the home. In the above tabulation, 
for example, the dealers sell Grade *' B " milk to grocery stores in glass 
bottles for 13 cents per quart, while they charge 14 cents per quart for the 
same milk to consumers at their homes. 

Many grocery stores retail milk whether in bottles or in cans at the 
same price charged to the store by the dealer. 

Many of the largest grocerymen in New York City have attended a 
conference at which they indicated their willingness to undertake to sell 
milk from grocery stores at no charge for delivery service because the 
offering of milk at less than the retail price from wagons brings trade to 
the store for other things. This is not economical because the cost of such 
service must necessarily be added to the cost of other commodities. From 
the standpoint of infants and children, however, such a philanthropy might 
be encouraged for the same reason that the sale of bottle milk from the 
infant milk depots is encouraged. 

On the other hand, if the grocery store should charge a profit of 1 cent 
per quart on bottle milk, it would make the retail price identical with the 
retail price of the same milk delivered from retail wagons to the homes. 

A study of the figures obtained by the expert accountant employed by 
the Committee on the books of the Borden's Farm Products Company relat- 
ing to the cost of bottle milk sold to grocery stores at wholesale shows that 



il 



even when this milk is sold to the storekeeper by the company for 13 cents, 
there is a loss to the company of .004387 cent per quart at the present time. 
One needs only to reflect that the grocery store constitutes an additional item 
or factor in the delivery system to recognize that if the grocer charges a 
profit for himself it necessarily adds another cost item to the cost of delivery. 

The figures obtained indicate that from the standpoint of the milk con- 
sumer, there is not to be expected any saving in the retail price of milk 
through distribution from grocery stores. 

On the other hand, milk stores handling large volumes of milk make 
possible the delivery to them of such large quantities of milk at one opera- 
tion that the cost of delivery to the dealer is greatly reduced. The delivery 
of an entire wagon load of bottle milk to one milk store is plainly much 
cheaper for the dealer than the delivery of the same wagon load to a chain 
of grocery stores at some distance from each other. 

In the list of cost items obtained by the expert accountant's audit of 
the books of the Borden's Farm Products Company, concerning the sale of 
milk from the company's own milk stores, it is shown that the cost of de- 
livery, even including the expenses of operating the store itself, is less than 
the cost of delivering the same milk to grocery stores. 

These figures seem to justify the belief that milk can be retailed from 
niilk stores at a less price than it can be retailed from grocery stores. The 
difiFerence, however, is not equal to a fuU penny, but a fraction, and could 
not be of advantage to the consumer unless milk was sold at a price which 
in some way provided for the splitting of the penny into at least one half 
penny amounts. This might be brought about through the adoption of 
tickets, which has already been done in some other cities. 

Loose milk from grocery stores. 

Milk in 40-quart cans sold to grocery stores at 10 cents per quart is 
retailed by such stores at not more than 11 cents per quart. This is the 
cheapest milk offered to the public, costing 3 cents per quart less than milk 
distributed in bottles from retail wagons. From a sanitary standpoint it is 
believed to be unsafe for the use of infants and children. In the question- 
naire sent out by the Committee to 123 cities in America, 65 replies were 
received, and without exception every health officer condemned the sale of 
loose milk. In not more than 3 or 4 cities was the sale of loose milk per- 
mitted at all. In such cities as Boston and Chicago, the sale is entirely 
prohibited. 



1. 
2. 



C0NCLUS10N& 

Milk is the most valuable and the cheapest of human foods even at 

present prices. 
For drinking purposes New York City now uses only about 700,000 

quarts daily. The city should use about 2,000,000 quarts daily for 

drinking in an ideal diet. 



85 

3. The cost of milk production at present prices is 7 cents per quart and 

the prices asked by the Dairymen's League are justified. 

4. The cost of distribution as shown by the dealers' accounts is justified 

and not large enough to prevent business losses. 

5. The cost of production can be reduced by 

(a) eliminating low-producing cows, 

(b) collective hauling of milk, 

(c) collective buying of grain. 

6. The cost of distribution can be reduced by abolishing competition and 

duplication through centralizing the distributing system into a 
single company or public service corporation. 









M. B. Brown Printing & Binding Co., 
New York 



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